Fred's income increases from $1,950 per week to $2,050 per week.As a result,he decides to increase the number of movies he attends each month by 10 percent.Fred's demand for movies is
A)price elastic.
B)price inelastic.
C)income elastic.
D)income inelastic.
E)income inferior.

Question

Quizplus · Accepted Answer

Fred's decision to increase his consumption of movies as his income increases indicates that his demand for movies is income elastic, meaning the quantity demanded changes significantly with a change in income.

Fred's Income Increases from $1,950 Per Week to $2,050 Per