Because Product X has a very small, positive income elasticity of demand, it is likely that product X is a
A) luxury.
B) necessity.
C) product with many good substitutes.
D) product with many good complements.

Question

Quizplus · Accepted Answer

A small, positive income elasticity of demand indicates that as income increases, the demand for Product X increases slightly, suggesting it is a necessity rather than a luxury.

Because Product X Has a Very Small, Positive Income Elasticity