The income elasticity of demand of a normal good is:
A) between -1 and 0.
B) less than 0.
C) equal to 0.
D) greater than 0.

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. Thus, the income elasticity of demand of a normal good is greater than 0.

The Income Elasticity of Demand of a Normal Good Is