Consider the income elasticity of demand for turnips.An increase in income will
A)always increase the demand for turnips.
B)decrease the demand for turnips if turnips have a very low price.
C)increase the demand for turnips if turnips are normal goods.
D)increase the demand for turnips if turnips are inferior goods.
E)increase the supply of turnips.

Question

Quizplus · Accepted Answer

If turnips are normal goods, an increase in income will lead to an increase in demand for turnips, as consumers will have more disposable income to spend on a wider variety of goods, including turnips. This is because turnips are not generally considered inferior goods, meaning that as consumers become wealthier, they do not substitute turnips for more expensive goods.

Consider the Income Elasticity of Demand for Turnips