Final answer:
The overall consumption of cupcakes and bagels after a decrease in the price of cupcakes cannot be determined for Monique without additional information, as her choices depend on both the income effect and the substitution effect related to her preferences and the cross-price elasticity of demand.
Step-by-step explanation:
Given that a bagel is an inferior good for Monique, and the price of a cupcake decreases, the direct answer to the question is: D. Monique's overall consumption of cupcakes and bagels cannot be determined from the given information.
In economic terms, an inferior good is one where demand decreases as income increases, because consumers can afford better alternatives. However, when analyzing the impact of a price decrease of a good (cupcakes in this case), without information about Monique's income level, her preferences, or the cross-price elasticity of demand between cupcakes and bagels, we cannot predict with certainty how her consumption will change. Consumption changes depend on the combined effect of the income effect and the substitution effect. A decrease in the price of cupcakes may allow Monique to consume more of them (substitution effect), but as a result of spending less money on cupcakes, her effective income increases, which might lead to an increase or decrease in bagel consumption depending on whether she views more cupcakes as a substitute or complement to bagels, and the extent to which she experiences the income effect.