If the income elasticity of demand for a good is positive and less than one, the good must be

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When the income elasticity of demand for a good is positive and less than one, it indicates that as income increases, the demand for the good also increases, but at a slower rate than the increase in income. This characteristic is typical of a normal good, as people spend a higher proportion of their income on these goods when they have more money, but the increase in demand is proportionally less than the increase in income. Luxury goods, by contrast, have an income elasticity greater than one, indicating demand increases faster than income. Inferior goods have a negative income elasticity, meaning demand decreases as income increases. Substitute goods' demand elasticity is related to the price changes of other goods, not income changes.

If the Income Elasticity of Demand for a Good Is