Answer to Question #222351 in Microeconomics for Amy

Question

If a 10% increase in income causes a 20% increase in the quantity demanded for a good or service. It can be concluded that

A. the good or service is a necessity.

B. the price elasticity of the good or service is greater than one.

C. the good or service is a luxury good.

D. the income elasticity of the demand for the good or service is negative

Answer 1

A. the good or service is a necessity.