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Economics (AS & A Level) · Oct / Nov 2021 · Paper 11 · Question 13

9708Price elasticity, income elasticity and cross elasticity of demand

The diagram shows how a 10% increase in consumer incomes shifts the demand for good X from D to D1. Which statement about good X is correct?

  1. AIt is a normal good with income elastic demand.
  2. BIt is a normal good with income inelastic demand.
  3. CIt is an inferior good with income elastic demand.
  4. DIt is an inferior good with income inelastic demand.

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Correct answer: C. It is an inferior good with income elastic demand.

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