If a 6 percent increase in income results in a 10 percent increase in the quantity demanded of pizza,then the income elasticity of demand for pizza is
A)negative and therefore pizza is an normal good.
B)negative and therefore pizza is a inferior good.
C)positive and therefore pizza is an inferior good.
D)positive and therefore pizza is a normal good.

Question

Quizplus · Accepted Answer

An increase in income resulting in an increase in quantity demanded indicates that pizza is a normal good. The positive relationship between the two variables also suggests a positive income elasticity of demand, which means that the answer is either C or D. However, since the increase in income results in an increase in quantity demanded, the correct answer is D (positive income elasticity of demand).

If a 6 Percent Increase in Income Results in a 10