If an increase in a consumer's income causes the consumer to increase his quantity demand of a good, then the good is ?
Correct answer: C. a normal good
- A. a complementary good
- B. an inferior good
- C. a normal good
- D. a substitute goodEconomics
Explanation
A normal good has positive income elasticity of demand, meaning its quantity demanded rises as consumer income rises. For an inferior good, demand falls when income increases.
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About Microeconomics
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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