Both b and c will happen. The income effect says to consume more of both goods. The total effect says that consumption of good A may decrease or increase. Different consumers have different elasticities of demand for the good. Consumers who buy at a low price cannot resell the good.
Consumers have different values of time.
All of the above. List three assumptions of the model of perfect competition. For each one, discuss how the behavior of firms or consumers might change if the assumption were violated. 1. large number of buyers and sellers. If there are few buyers or few sellers, then any one of them can affect the price by increasing or decreasing the quantity that it buys or sells.