When Income Increases by 1%,the Quantity Demanded of a Good

question 11

Essay

When income increases by 1%,the quantity demanded of a good decreases by 2%.What is the income elasticity of the good? Is the good normal or inferior? Why?

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Definitions:

Partnership

A legitimate form of commercial enterprise that involves shared management and profit distribution among two or more participants.

Owner

An individual or entity that possesses property, rights, or interests in an asset or item.

Capital Contribution

The funds, property, or other assets provided by owners or partners to a company for use in the business.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.