If the income elasticity of a good is greater than one, we say that its demand is
A) price sensitive.
B) income-inelastic.
C) income-elastic.
D) price insensitive.

Question

Quizplus · Accepted Answer

If the income elasticity of a good is greater than one, it means that the quantity demanded of that good is highly responsive to changes in the consumer's income. This is known as income-elastic.

If the Income Elasticity of a Good Is Greater Than