Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Which of the following is / are characteristics of a Normal good?
1. The demand falls with increase in prices of the good
2. The demand decreases with increase in income
3. The demand increases with increase in income

Select the correct answer using the code given below

• A. 1 only
• B. 1 and 2
• C. 1 and 3
• D. All of the above.

Answer 1

The correct option is C 1 and 3

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> A normal good is a good that experiences an increase in its demand due to a rise in consumers' income. In the case of normal goods, income and demand are directly related, meaning that an increase in income will cause demand to rise and a decrease in income causes demand to fall. For example, for most people, consumer durables, technology products and leisure services are normal goods.As per Law of Demand ,If the price goes up, the quantity demanded goes down. If the price decreases, quantity demanded increases.