Question

Which of the following is most likely to cause the demand for ice cream, a normal...

Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease?

a- a decrease in the price of ice cream

b-a decrease in the price of milk

c-warmer weather

d-an increase in the number of consumers

e- a decrease in consumer income

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Homework Answers

Answer #1

Option e

A normal good demand and income are positively related.

A decrease in the income decreases demand for the good and vice verse.

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a- a decrease in the price of ice cream

It will increase quantity demanded of the good, and it is movement along the same demand curve, but a decrease in demand is left shift of the demand curve.

b-a decrease in the price of milk

Milk is an input for the production of ice cream, a decrease in the cost increases supply and no effect on demand.

c-warmer weather

Warmer weather increases demand cold products, and ice cream is also cold, so the demand increases for it.

d-an increase in the number of consumers

Increase in the number of consumers increases the demand.

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