Consider the market for cable-based internet access service, which is a normal good. explain whether the following events would cause an increase or a decrease in demand or an increase or a decrease in the quantity demanded. a. firms providing wireless (an alternative to cable) internet access services reduce their prices. b. firms providing cable-based internet access services reduce their prices. c. there is a decrease in the incomes earned by consumers of cable-based internet access services. d. consumers’ tastes shift away from using wireless internet access in favor of cable-based internet access services.

a. Decrease in demand

b. Increase in quantity demanded

c. Decrease in demand

d. Increase in demand

Explanation:

A change in quantity demanded of any product is caused by change in its price while other factors are constant. On the other hand, a change in the demand is caused because of change in other factors while the price of the product remains constant.  

a. Here, a wireless internet access service is a substitute for cable-based internet service. A decline in the price of substitute will cause consumers to prefer the cheaper substitute. As a result, the demand for cable-based service will decline.  

b. With the decline in the price of cable-based service will lead to an increase in the quantity demanded.

c. A decrease in the income of the consumers would lead to a decline in the demand as the consumers will be able to afford less.  

d. A shift in consumer's taste in favor of cable-based services will lead to an increase in demand as people will now prefer more of cable-based services.

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