Consider goods and that are perfect substitutes. The original prices were $10 and $9 respectively.
His income is $720. If one day the price of is 8$, what will happen
a. The quantity of becomes 90 due to income
effect.
b. The quantity of is 80 due to substitution effects
will grow to
c. The quantity of is 90 due to substitution effects
will grow to
d. The quantity of is 80 due to substitution effects
will grow to
e. The above answers are incorrect