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Unformatted text preview: • If you increase the price an elastic good such as Snickers, Butterfinger will have a higher demand. • If you increase the price of milk, the quantity demanded for candy bar will decrease. Dad or mom will not be able to pay for the candy bars – they are substitutes for each other. • Inferior good: o A good that decreases in demand when the consumer income rises. o Irish potato famine: people actually purchased more potatoes because their purchasing power decreased. o Example: spam, hamburger meat, pizza. • Normal good: o We tend to buy more of when our income increases. o The term does not refer to the quality of goods....
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This note was uploaded on 04/11/2008 for the course AAEC 1005 taught by Professor Mjellerbrock during the Fall '07 term at Virginia Tech.
- Fall '07