The total income received by a producer will fall if: a. Income grows and the good is normal b. Price grows and demand is elastic c. Price grows and demand is inelastic. d. Income falls and the good is inferior Note: you are asked to argue which alternative is the correct one; and further argue why the other alternatives are false or uncertain.

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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.