Q323
If income elasticity for a good is 2, then it is a
A.
Necessity item
B.
Inferior good
C.
Luxury item
AnswerD.
Comfortable item
Answer: Option C
Solution
Answer: Option C
Solution:
If income elasticity for a good is 2, then it is a Luxury item. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.