What Is the Effect of a Rise in Income on the Demand

question 111

Multiple Choice

What is the effect of a rise in income on the demand for a product?

• A)It will rise if the product is an inferior product.
• B)It will rise if the product is a normal product.
• C)It will fall if the product is a normal product.
• D)It will fall in both cases of a normal or inferior product.

---

Definitions:

Selling Price

The price at which a product or service is offered to customers for purchase.

Target Cost

The desired cost of a product determined by subtracting a desired profit margin from a competitive market price, guiding cost management efforts.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit, such as purchasing stocks, bonds, or real estate.

Projected Sales

Forecasted revenue from goods or services that a company plans to sell over a certain period.