Question

Last​ year, the price of steak was ​$4 per pound and the price of salmon was ​$5 per pound.       This​ year, the price of steak is ​$6 per pound and the price of salmon is ​$7 per pound.   All other things​ equal, and assuming that David purchased both items​ before, what would you expect to happen to his purchases of steak ​(relative to salmon​) this​ year?

Answer 1

Answer:

The relative price of steak has increased, so David would be expected to purchase less.4/5 = 0.86/7 = 0.860.86 > 0.8D.