The following table shows a demand schedule for a normal good:
|
Price
|
Quantity Demanded
|
|
23
|
70
|
|
21
|
90
|
|
19
|
110
|
|
17
|
130
|
- Do you think that the increase in quantity demanded (say from 90 to 110 in the table) when price decreases (from $21 to $19) is due to a rise in consumers' income? Explain clearly why or why not.
- Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
- Lastly, assume you do not know whether the good is normal or inferior. Devise and experiment that would allow you to determine which one it was. (Doesn't have to be a feasible experiment.) Explain.