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Suppose Tom consumes pedal bikes and e-bikes. The price increases for pedal bikes and Tom continues to purchase the same quantity as before the price
Suppose Tom consumes pedal bikes and e-bikes. The price increases for pedal bikes and Tom continues to purchase the same quantity as before the price increase. Illustrate graphically the price-consumption curve and pedal bike demand curve on two separate graphs given this information. Discuss the directions and magnitudes of the income and substitution effects. Are pedal bikes normal or inferior for Tom? Explain.
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