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30 August, 05:24

In year 1 the average price of X is $10, and in year 2 the average price of X is $23. Still, consumers buy more units of X in year 2 than in year 1. It follows that

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  1. 30 August, 05:36
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    Demand for good x could be higher in year 2 than year 1

    Income may have been higher in year 2 than year 1

    Explanation:

    In the given scenario there was an average price of product as $10. To calculate average cost it is total sales revenue divided by number of units sold.

    In year 2 the average price is $23. This means that for each unit sold in year 2 the price was $23 an increase of $13 from year 1.

    For this to have happened first there could have been higher income of the consumer in year 2 and they will have more to spend on the product at a higher price.

    There will also need to be an increase in the demand for the good this will increase units sold and also price will go up.
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