If for good Z income elasticity is greater than 1, then demand for good Z is income __________, and good Z is a(n) __________ good.
A)inelastic; normal
B)inelastic; inferior
C)elastic; normal
D)elastic; inferior
E)unit elastic; normal

Question

Quizplus · Accepted Answer

When the income elasticity of demand for a good is greater than 1, it means that demand for the good increases by a higher percentage than the increase in income, indicating that the good is a luxury or a normal good with elastic demand relative to income changes.

If for Good Z Income Elasticity Is Greater Than 1