If the income elasticity of demand for a good is 1.75, then it is what type of good?
A) Price elastic.
B) Price inelastic.
C) Income inelastic.
D) Income elastic.

Question

Quizplus · Accepted Answer

If the income elasticity of demand for a good is greater than 1, then the good is considered income elastic, which means a small increase in income leads to a larger increase in the quantity demanded of the good. In this case, the income elasticity of demand is 1.75, indicating that the demand for the good is responsive to changes in income, and therefore, it is an income elastic good.

If the Income Elasticity of Demand for a Good Is