For a normal good, the income elasticity of demand will be:
A)negative.
B)positive.
C)0.
D)determined by the direction of the change in income.

Question

Quizplus · Accepted Answer

Income elasticity of demand measures the responsiveness of quantity demanded to a change in income. For a normal good, as income increases, the demand for the good also increases. Hence, the income elasticity of demand will be positive.

For a Normal Good, the Income Elasticity of Demand Will