Asked by
Louise Winter
on Nov 25, 2024
Verified
If the coefficient of income elasticity of demand is positive, the product is an inferior good.
Income Elasticity
A rephrased definition: The responsiveness of demand for an item to changes in the income of the people demanding the item.
Inferior Good
A good or service whose consumption declines as income rises, prices held constant.
Positive
Characterized by or denoting an effect, result, or attribute that is beneficial or conducive to growth or well-being.
- Apprehend the idea and significance of income elasticity of demand in economics.
- Identify the distinctions among product types as classified by income elasticity (normal goods, inferior goods, luxury items, and necessities).
Verified Answer
AN
Learning Objectives
- Apprehend the idea and significance of income elasticity of demand in economics.
- Identify the distinctions among product types as classified by income elasticity (normal goods, inferior goods, luxury items, and necessities).