A product for which demand increases more relative to an increase in income has an income-elasticity coefficient less than 1.

Question

Quizplus · Accepted Answer

A product for which demand increases more relative to an increase in income has an income-elasticity coefficient greater than 1. A coefficient less than 1 indicates that the product is income-inelastic, meaning that demand for the product does not increase proportionally with an increase in income.

A Product for Which Demand Increases More Relative to an Increase