The income elasticity of demand is ________ for a normal good and ________ for an inferior good.
A) positive; positive
B) positive; negative
C) negative; positive
D) negative; negative

Question

Quizplus · Accepted Answer

For a normal good, the income elasticity of demand is positive because demand increases as income increases. For an inferior good, it is negative because demand decreases as income increases.

The Income Elasticity of Demand Is ________ for a Normal