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Maddie spends all of her income on chocolate and bonbons, two normal goods. Suppose that the price of chocolate decreases. Which of the following is
Maddie spends all of her income on chocolate and bonbons, two normal goods. Suppose that the price of chocolate decreases. Which of the following is a correct explanation of the substitution effect of this price change? Question 5 options: Maddie's purchasing power has increased, so she will buy more chocolate and more bonbons. Maddie's purchasing power has decreased, so she will buy less chocolate and fewer bonbons. The relative price of chocolate has decreased, so Maddie will buy less chocolate and more bonbons. The relative price of chocolate has decreased, so Maddie will buy more chocolate and fewer bonbons
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