Answer to Question #88046 in Microeconomics for Thembisile

Question

The income of a consumer increases by 10% resulting in a 12% increase in the demand for particular product. What type of a product is that

Answer 1

High income elasticity of demand is present in the case under consideration. Growth of a customer's income causes higher growth of demand for a product. This is the so-called normal good. Also, it is possible to assume that it is a luxury good or a superior good.