Assume That a 4 Percent Increase in Income Results in a 2

question 94

Multiple Choice

Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is

• A)negative, and the good is an inferior good.
• B)negative, and the good is a normal good.
• C)positive, and the good is a normal good.
• D)positive, and the good is an inferior good.

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Definitions:

Strategic Intent

The long-term vision that defines a company's aspirations and determinates its strategy to achieve competitive advantage.

Strategy

A plan of action designed to achieve a long-term or overall aim.

Consistent

Marked by harmony, regularity, or steady continuity, free from variation or contradiction.

Oligopoly Environment

A market structure characterized by a small number of firms that dominate the market, leading to limited competition.