If Income Increases from $50,000 to $60,000 While the Demand

question 40

Essay

If income increases from $50,000 to $60,000 while the demand for a good increases from 100 units to 125 units, what is the income elasticity of demand? Is the good a normal good or an inferior good?

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Definitions:

Electronic Means

The use of electronic devices or systems, such as computers and the Internet, for communication or executing transactions.

Questionable Enforceability

Questionable enforceability refers to the uncertain legal status of a contract or clause, where its compliance with law or ability to be upheld in court is doubtful.

Writing Requirements

Legal stipulations that certain agreements, contracts, or transactions must be documented in writing to be legally enforceable.

E-commerce

The exchange of goods and services or the transfer of money or information, mainly through the internet or other electronic networks.