If an increase in income results in higher prices for yachts, we can conclude
A)that yachts are inferior goods.
B)that there was a decrease in the supply of yachts.
C)that there was an increase in the supply of yachts.
D)that yachts are normal goods.
E)there's no relationship between income and the demand for yachts.

Question

Quizplus · Accepted Answer

This is because the relationship between income and demand for yachts is positive, meaning that as income increases, demand for yachts also increases. Therefore, yachts are a normal good. The increase in prices for yachts is likely due to increased demand resulting from the increase in income.

If an Increase in Income Results in Higher Prices for Yachts