An increase in income will
A)increase the demand for SUVs if SUVs are inferior goods.
B)always increase the demand for SUVs.
C)increase the supply of SUVs.
D)decrease the demand for SUVs if SUVs have a very low price.
E)increase the demand for SUVs if SUVs are normal goods.

Question

Quizplus · Accepted Answer

An increase in income will increase the demand for normal goods, and if SUVs are considered normal goods for a particular group of consumers, then their demand will increase with an increase in income. However, if SUVs are considered inferior goods, their demand will decrease with an increase in income.

An Increase in Income Will