Sally eats at the local burger restaurant. Suddenly the restaurant lowers its prices. A - In response to the low prices of burgers, Sally reduced her visit to the pizzeria. Can we know from this whether pizza was a bad product for Sally or not? B - Suppose instead that, in response to the drop in burger prices, Sally goes to the burger restaurant a lot Explain how this might happen in terms of income and substitution effects (using the concepts of normal and inferior goods)?

Economics: Private and Public Choice (MindTap Course List)
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ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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Chapter20: Consumer Choice And Elasticity
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Sally eats at the local burger restaurant. Suddenly the restaurant lowers its prices.
A - In response to the low prices of burgers, Sally reduced her visit to the pizzeria. Can we know from this whether pizza was a bad product for Sally or not?
B - Suppose instead that, in response to the drop in burger prices, Sally goes to the burger restaurant a lot
Explain how this might happen in terms of income and substitution effects (using the concepts of normal and inferior goods)?

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