If a good has an income elasticity of demand greater than 1,one might classify that good as
A) a necessity.
B) a luxury.
C) unusual.
D) inelastic.

Question

Quizplus · Accepted Answer

If a good has an income elasticity of demand greater than 1, it means that as consumers' income rises, demand for the good increases by a greater percentage than the increase in income. This suggests that the good is a luxury, as it is not considered a necessity and people only demand it when they have sufficient income to afford it.

If a Good Has an Income Elasticity of Demand Greater