The income elasticity of demand for fresh winter vegetables has been estimated to be 0.6. If income grows by 10% in a given period, demand will:
A)increase by more than 10%.
B)increase by about 6%.
C)decrease by more than 10%.
D)decrease by less than 6%.

Question

Quizplus · Accepted Answer

The income elasticity of demand for fresh winter vegetables is 0.6 which is less than 1, indicating an inferior good. Hence, a 10% increase in income will increase demand by about 6%.

The Income Elasticity of Demand for Fresh Winter Vegetables Has