If the income elasticity of demand is greater than 1, the commodity is:

CA Foundation · Business Economics · MTP · May 2026
If the income elasticity of demand is greater than 1, the commodity is:
(A) A. a necessity
(B) B. a luxury
(C) C. an inferior good
(D) D. a nonrelated good

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. a luxury

Topics: Theory of Demand and Supply

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