In the context of the sensitivity of demand for a product relative to changes in income,a coefficient greater than 1.0 conveys a(n)________.
A) surplus product
B) economic equilibrium
C) economic surplus
D) income-elastic product

Question

Quizplus · Accepted Answer

A coefficient greater than 1.0 indicates that the demand for a product is income-elastic, meaning that the percentage change in demand is greater than the percentage change in income. This means that the demand for the product is sensitive to changes in income, and as income increases, the demand for the product will increase at a greater rate than the increase in income.

In the Context of the Sensitivity of Demand for a Product