For which of the following types of goods would the income elasticity of demand be positive and relatively large?
A)all inferior goods
B)all normal goods
C)goods for which there are many complements
D)luxuries

Question

Quizplus · Accepted Answer

Luxuries have a high income elasticity of demand since as income increases, people have more disposable income to spend on these types of goods, causing demand to increase proportionally more than income.

For Which of the Following Types of Goods Would the Income