Question

Which of the following that will occur when the price of normal good falls?

a. The income effect and the substitution effect will work to increase the quantity demanded of goods whose price decreases due to an increase in purchasing power.

b. The income and substitution effect will work towards decreasing the demand of consumers because the purchasing power will relatively decrease from the fall of the price.

c. The substitution effect expresses that the sales of goods whose price rises to increase.

d. None of the above.