Question

if Income increases and the demand for a product increases then we can conclude that A....

if Income increases and the demand for a product increases then we can conclude that
A. prodct is an inferior product
B. product is a normil product
C. marginal unitity of the product will increase
D. produch has an inelastic demand
E. product has an elastic demand
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Answer #1

Option B

A normal good means an increase in income causes an increase in demand. It has a positive income elasticity of demand. A normal good can be income elastic or income inelastic.Examples of normal goods include food staples, clothing, and household appliances. A luxury good is also a normal good, but a normal good isn’t necessarily a luxury good. A luxury good has income elasticity of demand greater than 1. When income rises, people spend a higher percentage of their income on the luxury good.

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