Which of the following statements is correct regarding price effect?

Question

Economics · Consumer Behaviour

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

The income effect of a price change is positive for normal goods.

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Answer 1

For Giffen goods, the substitution effect is stronger than the income effect.

Answer 2

The income effect of a price change is positive for inferior goods.

Answer 3

The income effect of a price change is positive for normal goods.

Answer 4

The substitution effect of a price change is always positive.

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