If the income elasticity for hybrid cars is positive:
A)there are many substitutes for hybrid cars.
B)there are few substitutes for hybrid cars.
C)hybrid cars are a normal good.
D)hybrid cars are an inferior good.

Question

Quizplus · Accepted Answer

A positive income elasticity means that as income increases, demand for hybrid cars increases. This indicates that hybrid cars are a normal good, meaning they are a product that people buy more of as their income increases.

If the Income Elasticity for Hybrid Cars Is Positive