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The market for good X is currently in equilibrium
The market for good X is currently in equilibrium.
Which of the following choices would not cause both a decrease in the equilibrium price of good X and a decrease in the equilibrium quantity of good X?
A. A decrease in consumer income and good X is a normal good.
B. An increase in consumer income and good X is an inferior good.
C. An increase in the price of good Y, a complement for good X.
D. A decrease in the price of good Y, a substitute for good X.
E. An increase in the number of consumers in the market for good X.
Expert Solution
The correct option is (E) as with an increase in the number of consumers in the market for Good X would raise the demand for good X and thus the equilibrium quantity. Additionally, the price will also increase.
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