An economist for a bicycle company predicts that,other things equal,a rise in consumer incomes will increase the demand for bicycles.This prediction assumes that:

A) there are many goods that are substitutes for bicycles.
B) there are many goods that are complementary to bicycles.
C) there are few goods that are substitutes for bicycles.
D) bicycles are normal goods.

Question

Doniyor Rahimov · Accepted Answer

Final Answer : D, Explanation :  If the economist predicts that a rise in consumer incomes will increase the demand for bicycles, then it is assumed that bicycles are normal goods. Normal goods are those goods whose demand increases with an increase in consumer income. Therefore, option D is the correct answer. Options A and B point to substitute and complementary goods, respectively, which are not relevant in this case. Option C contradicts the economist's prediction.

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