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The CEO of Baking Goods Services recently gave the keynote address to employees at the annual Goodlettesville Food Show, a significant gathering of industry-wide food
The CEO of Baking Goods Services recently gave the keynote address to employees at the annual Goodlettesville Food Show, a significant gathering of industry-wide food service companies. She says the following in her speech: "A demand curve for our Chocolate Chunk Brownie is derived from decomposing the total effects of a price change into a substitution effect and an inferior effect. Since our consumers will always consume less of these cookies when they get boosts to their incomes, then our cookies are considered a normal good....and a demand curve that is well-behaved will be downward-sloping." Choose the correct answer below regarding this statement. Student hint(s): It may help to review the customized pdf lectures indiff curve. Question options: a) a. The statement will be accurate if it reads as: "A demand curve for our Chocolate Chunk Brownie is derived from decomposing the total effects of a price change into a substitution effect and an income effect. If our cookies are a Giffen good, then consumers may consume more of these cookies when the price goes up, and the demand curve may be potentially upward-sloping in a certain range." b) b. The statement will be accurate if it reads as: "A
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