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demand will send the price up again It is not certain therefore that an innovation will really reduce price in the end b study shows that eating a clove of garlic a day can help prevent heart

demand will send the price up again. It is not certain, therefore, that an innovation will really reduce price in the end.” b. “A study shows that eating a clove of garlic a day can help prevent heart disease, causing many consumers to demand more garlic. This increase in demand results in a rise in the price of garlic. Consumers, seeing that the price of garlic has gone up, reduce their demand for garlic. This causes the demand for garlic to decrease and the price of garlic to fall. Therefore, the ultimate effect of the study on the price of garlic is uncertain.” 8. The following table shows a demand schedule for a normal good. a. Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from $21 to $19) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not. b. Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good? c. Lastly, assume you do not know whether the good is normal or inferior. Devise an experiment that would allow you to determine which one it was. Explain. 9. According to the New York Times 

May 01 2020 View more View Less

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