Premium beer is likely considered
A)a normal good.
B)an inferior good.
C)to have inelastic demand.
D)to have perfectly elastic demand.

Question

Quizplus · Accepted Answer

Premium beer is likely considered a normal good because as consumers' incomes increase, they are more likely to purchase higher quality and more expensive beer. This means that as incomes rise, the demand for premium beer would increase, indicating a positive income elasticity of demand. 
Option B, inferior goods, are goods that see a decrease in demand as incomes rise. Option C, inelastic demand, would indicate that demand for premium beer is not very responsive to changes in price. Option D, perfectly elastic demand, would indicate that consumers are extremely sensitive to price changes and a small increase in price would result in a complete loss of demand for premium beer.

Premium Beer Is Likely Considered