All normal goods have A. income elasticities of demand greater than 1.0. B. price elasticities of demand greater than 1.0. C. negative price elasticities of demand. D. positive income elasticities of demand.

All normal goods have A. income elasticities of demand greater than 1.0. B. price elasticities of demand greater than 1.0. C. negative price elasticities of demand. D. positive income elasticities of demand.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 8E

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Concept explainers

Elasticity of Demand and Supply

The elasticity of demand and supply are two important concepts of microeconomics. The elasticity of demand measures the responsiveness of consumers’ demands to the price change, changes in income of consumers, and changes in the price of the related goods. Similarly, the elasticity of supply refers to the proportionate change in the quantity supplied due to the proportionate change in the price. In other words, it can be said that elasticity of supply measures how the quantity of supply changes when the price changes of that particular product.

Question

All normal goods have

A. income elasticities of demand greater than 1.0.

B. price elasticities of demand greater than 1.0.

C. negative price elasticities of demand.

D. positive income elasticities of demand.

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