Question

For a normal good with a downward sloping demand curve:

• 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.

Answer 1

The correct option is C

The price elasticity of demand is negative; the income elasticity of demand is positive.

The price elasticity of demand is negative; the income elasticity of demand is positive.