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Consider the Ordinary and Compensated Demand Curves for a Normal

Question 74

Multiple Choice

Consider the ordinary and compensated demand curves for a normal good.If the price of the good falls,then


A) the ordinary demand curve will show the larger increase in quantity demanded.
B) the compensated demand curve will show the larger increase in quantity demanded.
C) the increase in quantity demanded will be the same for the ordinary and compensated demand curves.
D) we cannot predict whether ordinary or compensated demand will show the larger response in quantity demanded.

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