For which of the following goods is the income elasticity of demand likely to be largest?
A)poultry products
B)meals at restaurants
C)lemonade
D)used books
E)paperback mystery novels

Question

Quizplus · Accepted Answer

Meals at restaurants are often considered a luxury or discretionary good, meaning that as income increases, individuals have a greater ability to purchase more meals at restaurants. Therefore, the income elasticity of demand for meals at restaurants is likely to be larger than for goods that are considered necessities or have readily available substitutes.

For Which of the Following Goods Is the Income Elasticity