Suppose there are only two normal goods in the economy, X and Y. If price of good X increases, which would be the correct statement from below? (a) Demand for good X decreases and demand for Y indeterminate. (b) Demand for good X decreases and demand for

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Q: 25 (CDS-II/2024)
Suppose there are only two normal goods in the economy, X and Y. If price of good X increases, which would be the correct statement from below?
(a) Demand for good X decreases and demand for Y indeterminate.
(b) Demand for good X decreases and demand for Y decreases.
(c) Demand for good X increases and demand for Y is indeterminate.
(d) Demand for good X increases and demand for Y decreases.

question_subject: 

Economics

question_exam: 

CDS-II

In general, if the price of a normal good X increases, its demand decreases as it becomes more expensive, according to the law of demand. The effect on good Y is indeterminate without additional information about the relationship between X and Y.