The price of a particular brand of canned soup, which is a type of good that people buy more of when their real income falls, increases. A consumer observes that their total monthly consumption of this soup decreases by 5 cans. This total change is composed of two distinct parts: one change resulting from the consumer's reduced purchasing power, and another change resulting from the soup now being relatively more expensive than alternatives. If the change in consumption due to the consumer's reduced purchasing power is an increase of 2 cans per month, what is the change in consumption caused purely by the soup becoming relatively more expensive?
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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The price of a particular brand of canned soup, which is a type of good that people buy more of when their real income falls, increases. A consumer observes that their total monthly consumption of this soup decreases by 5 cans. This total change is composed of two distinct parts: one change resulting from the consumer's reduced purchasing power, and another change resulting from the soup now being relatively more expensive than alternatives. If the change in consumption due to the consumer's reduced purchasing power is an increase of 2 cans per month, what is the change in consumption caused purely by the soup becoming relatively more expensive?
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