If tobacco is a normal, income inelastic good, it follows that a 10 percent decrease in income will __________ quantity demanded by __________ than 10 percent.
A)increase; less
B)increase; more
C)decrease; less
D)decrease; more

Question

Quizplus · Accepted Answer

Since tobacco is a normal, income inelastic good, a decrease in income will lead to a decrease in the quantity demanded, but because it is income inelastic, the percentage decrease in quantity demanded will be less than the percentage decrease in income.

If Tobacco Is a Normal, Income Inelastic Good, It Follows