Suppose that when household income in a city rises by 2%, and the price of good X remains unchanged, the quantity demanded of good X decreases by 15%. Then, in this city, the income elasticity of demand for good X is (7.50, - 7.50, - 0.13, 0.13), and you know that good X is (an inferior good, a normal good).
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Home » Mathematics » Suppose that when household income in a city rises by 2%, and the price of good X remains unchanged, the quantity demanded of good X decreases by 15%. Then, in this city, the income elasticity of demand for good X is (7.50, - 7.50, - 0.13, 0.