Question

When the quantity demanded of a commodity increases with increase in income and decreases with decrease in income, the income elasticity of demand will be

• A. Positive
• B. Constant
• C. Zero
• D. Negative

Answer 1

The correct option is A

Positive

When the quantity demanded of a commodity increases with increase in income and decreases with decrease in income, the income elasticity of demand will be positive. This situation prevails in the case of normal commodities.