For a normal good ?
Correct answer: C. The price elasticity of demand is negative the income elasticity of demand is positive
- A. The price elasticity of demand is negative the income elasticity of demand is negative
- B. The price elasticity of demand is positive the income elasticity of demand is negative
- C. The price elasticity of demand is negative the income elasticity of demand is positive
- D. The price elasticity of demand is positive; the income elasticity of demand is positive
Explanation
A normal good has positive income elasticity because demand rises when income rises. Its demand normally slopes downward, giving it negative price elasticity, so option c combines both properties.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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