Below is some information on the demand for products K,L and M.

-Refer to the information above to answer this question.Which of the following is correct about product M?
A)It has an income elasticity of approximately 6.7.
B)It has an income elasticity of approximately 0.2.
C)It has an income elasticity of approximately 0.6.
D)It is a normal good.
E)It is an inferior good.

Question

Below is some information on the demand for products K,L and M.
 
-Refer to the information above to answer this question.Which of the following is correct about product M?
A)It has an income elasticity of approximately 6.7. 
B)It has an income elasticity of approximately 0.2. 
C)It has an income elasticity of approximately 0.6. 
D)It is a normal good. 
E)It is an inferior good.

Quizplus · Accepted Answer

Income elasticity of demand measures how the quantity demanded of a good responds to a change in consumers' income. If the income elasticity is positive, it indicates that the demand for the product increases as income increases, classifying it as a normal good. Without specific numerical values or additional context provided, we cannot accurately determine the exact income elasticity (options A, B, C). However, if a product's demand increases with income, it is considered a normal good, making option D correct. Options A, B, and C cannot be verified without numerical data, and without information suggesting that demand decreases as income increases, we cannot classify it as an inferior good (option E).

Below Is Some Information on the Demand for Products K,L