If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future, the type of firm that would be able to increase its sales if your expectations are met is
A)one that sells an inferior good.
B)one that sells a necessity good.
C)one that sells a luxury good.
D)one that sells a price-inelastic good.

Question

Quizplus · Accepted Answer

A luxury good is something that people will buy more of as their income rises. If the economy booms and average income increases, people will likely have more disposable income to spend on luxury goods, so a firm that sells luxury goods would likely see an increase in sales.

If You Expect the Economy Is Going to Boom and Average