"In a market in which demand is price inelastic, producers can gouge consumers and the government should set high standards of conduct for producers to ensure that consumers get a fair deal."
Which parts of this statement are positive and which are normative? Explain how you might go about testing the positive part.
The statement has two parts:
1. In a market in which demand is price inelastic, producers can gouge consumers.
2. In a market in which demand is price inelastic, the government should set high standards of conduct for producers to ensure that consumers get a fair deal.

A. Statement 1 is a positive statement and statement 2 is a normative statement.
B. Statement 1 is a normative statement and statement 2 is a positive statement.
C. Both statements are positive.
D. Both statements are normative.