Steve spends all his income on meals at restaurants and paperback novels. His usual restaurant meal costs $20, and paperback books cost $10. When Steve’s monthly income is $250, he goes out to eat 10 times and purchases 5 books. When his income rises to $280, he goes out to eat 8 times and purchases 12 books. Determine whether the following statements are true or false: Paperback books are normal goods    Restaurant meals are necessity goods Paperback books are luxury goods

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.