The Income Elasticity of Demand

question 6

Multiple Choice

The income elasticity of demand

• A)is usually zero because "you can only have so much."
• B)could be positive or negative or zero, depending on the nature of the good.
• C)can never be zero.
• D)must be positive because consumers tend to buy more at higher incomes.
• E)must be negative because of the law of increasing cost.

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Definitions:

Distribution Intensity

The level of market coverage pursued by a company, deciding how widely a product will be distributed, ranging from exclusive to intensive distribution.

Scrambled Distribution

involves a retailer carrying an assortment of goods in unrelated product categories, aiming to provide a one-stop shopping experience.

Intensive Distribution

Distribution strategy that involves placing a firm’s products in nearly every available outlet.