Suppose we observe the demand for hats decreases when consumers' income increases. Using only this information we could infer that A. the demand for hats is price unit elastic. B. the demand for hats is price inelastic. C. hats are substitutes for other goods. D. hats are normal goods. E. hats are inferior goods. Total Cost (S) Price ($) Quantity Demanded 24 0 21 1 18 2 15 3 12 4 28 33 40 49 60
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This means that as people have more money, they buy fewer hats. This is a characteristic of inferior goods. Inferior goods are goods for which demand decreases as income increases. This is the opposite of normal goods, for which demand increases as income Show more…
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