Demand for normal good is income elastic if a) a large percentage increase in income will...
Demand for normal good is income elastic if
a) a large percentage increase in income will result in a small percentage increase in Qd.
b) a small percentage increase in income will result in a large percentage increase in Qd.
c) an increase in income will not affect the Qd.
d) the good in question has close substitutes.
Homework Answers
Since income elasticity of demand is the sensitivity of the change in the quantity demanded with respect to change in the income.
slope of the income elasticity of demand is negative which means income and quantity demanded are inversely related.
And if the income elasticity of demand is elastic for normal good then even the small percentage change in the income there be will be large change in the percentage change of quantity demanded.
Option B is true
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