The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good.                                                                              a. How will the demand for good X change if consumer incomes decrease? b. How will the demand for good Y change if consumer incomes increase? c. How will the demand for good X change if the price of good Y increases? d. Is good Y a lower-quality product than good X? Explain.

Q: what happens to the total revenue if the quantity of demand decrease?

A: Total revenue is the product of price and total quantity.

Q: most people view good X as a(n) _________________ , then when incomes rise, the market demand for…

A: The law of demand establishes a negative relationship between the price of a good and its quantity…

Q: A firm that has the ability to control to some degree the price of the product it sells   A. faces a…

A: Under the monopoly there is full control on the price while under the monopolistic competition there…

Q: Choose the letter of the correct answer.     ____1. It is designed to measure the response of…

A: (1). The correct option is D. Elasticity is designed to measure the response of quantity demanded…

Q: A market consists of ten similar suppliers that are making the same supply decisions. To find the…

A: Market Supply Curve: It is the graphical representation of the summation of all individual Supply…

Q: The demand for a product is likely to be more elastic: A. when a product is a necessity. B. the less…

A: The elasticity of demand shows the responsiveness of change demand with the changes in prices. When…

Q: The following appeared in an article in the Wall Street Journal: “Last week, true to discount roots…

A: The question pertains to structure of the market in which the airline companies operate.

Q: Use the following information $6.00 Sell 6 million razors Variable cost = $3.00 Price elasticity =…

A: Price for a razor = $6 6 million razors are sold Variable Cost = $3 Price elasticity = -3 Cost to…

Q: What is the market price? What is the profit-maximizing output? What is total revenue at the…

A: A horizontal MR line means that the MR remains same as more of the output is sold. In others words,…

Q: Describe the different sources of demand.

A: Demand refers to the situation when the individual needs something and he/she has adequate resources…

Q: How does the equilibrium price and quantity change when here are bad rumors about a product? Are…

A: Demand refers to the quantity of the commodity which the consumers demand at various prices in the…

Q: The demand curve A indicates that

A: Demand curve A is perfectly inelastic demand curve. Here the elasticity would be zero.

Q: student gives swimming lessons at the local club. One summer the club charged $40 and enrolled 1,000…

A: (A) One summer the club charged $40 and enrolled 1,000 kids. The next summer the managers decided to…

Q: Why is equilibrium the best guideline for pricing a product? A. It is the best way to set the price…

A: Every firm in the market operates to maximise profit

Q: .3 R and B Railroad decided to reduce their fares to see if it would help their business. They…

A: Given, Reduction in ticket price = 25% Increase in revenue = $325,000 per month to $332,000

Q: 1. The equation for a demand curve is P = 48 - 3Q. What is the elasticity in moving from a quantity…

A: Note:  We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?…

A: The demand curve depicts the inverse relationship between the price of a product and the quantity…

Q: . Demand for good Q is estimated to be Q = 14 - P, where P is price.  If the prices rises from P =…

A: The demand equation Part a) Initial price P1 =$3, New price P2 =$6 Part b) Initial price P2 = $20,…

Q: margarine is     a. an inferior good.   b. a negative good.   c. a normal good   d. a…

A: When income increase from $25,000 to $50,000 the demand also increase from 1 to 3 units. This helps…

Q: price and quantity of hamburgers,

A: Substitute goods – these are 2 goods which can be used for a similar purpose, that means they are…

Q: An increase in consumer income will cause a decrease in the demand for an inferior good.  A.True…

A: The demand refers to the quantity of goods that a consumer is able and willing to purchase at a…

Q: How much would the firm’s revenue change if it lowered price from $12 to $10? Is demand elastic or…

A: Demand curve shows an inverse relationship between price and quantity demanded. Elasticity measures…

Q: Your younger brother needs $600 to buy a new computer. He has opened a sandwich stand to make the…

A: The elasticity of demand is the reaction of demand due to change in price of goods and services,…

Q: A buyer's willingness to pay for a good is the that good. It measures how much the the good. buyer…

A: "Consumer surplus occurs when the price the consumer pay for the commodity or service is less than…

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.