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

Question

Quizplus · Accepted Answer

An increase in income will generally lead to an increase in demand for normal goods, which are goods that people buy more of as their income increases. SUVs are typically normal goods, so an increase in income will likely lead to an increase in the demand for SUVs.

An Increase in Income Will