Suppose income increases by 25 percent and, as a result, the quantity of a particular brand of automobile demanded (holding t
he price for this particular automobile constant) increases by 49 percent The income elasticity of demand for this brand of car is ____(Enter your response rounded to two decimal places and include a minus sign if appropriate.)
This particular brand of automobile is a(n) _____ good
In another example, suppose market research shows that a particular brand of truck is a normal good and a luxury.
If so, then the income elasticity of demand for this truck is:
1. Less than 1 but greater than 0
2. Negative
3. Greater than 1
4. Positive
5. Zero
The <span>agency which enforces truth in advertising laws and defines deceptive and unfair advertising practices is the FTC, or the Federal Trade Commission </span>
In the case when the firm is in the perfect competition market so here the demand curve would be horizontal as because of the same product and also the transaction cost is lesser that means if someone rise the prices so the producer would lost all its revenue
Therefore as per the given situation, the option b is correct
