A demand schedule for a normal good is as follows: Price Quantity demanded Rs.230 70 210 90 190 110 170 130 i) Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not. ii) Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
A demand schedule for a normal good is as follows: Price Quantity demanded Rs.230 70 210 90 190 110 170 130 i) Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not. ii) Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 19QP
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Question
A
Price Quantity demanded
Rs.230 70
210 90
190 110
170 130
i) Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not.
ii) Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
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