Which of the following best describes the 'Strong Axiom of Revealed Preference' (SARP) in the context of consumer behavior?
1
SARP suggests that if a consumer prefers bundle A to bundle B when both are affordable, then the consumer must prefer bundle B to bundle A when the price of bundle B decreases.
2
SARP states that consumers always choose the most expensive bundle of goods they can afford.
3
SARP states that if a consumer prefers bundle A over bundle B, and bundle B over bundle C, then the consumer must prefer bundle A over bundle C.
4
More than one of the above
5
None of the above