Asked by
Kelsey Quinn
on Oct 08, 2024
Verified
An income elasticity coefficient of -1.8 means the product is a normal good.
Income Elasticity
A measure of how much the demand for a product or service changes relative to a change in consumers' income levels.
Normal Good
A good for which demand increases as the income of consumers increases and decreases as the income of consumers decreases.
- Distinguish between inferior and normal goods utilizing the concept of income elasticity of demand.
Verified Answer
AM
Learning Objectives
- Distinguish between inferior and normal goods utilizing the concept of income elasticity of demand.