For which of the following goods is the income elasticity of demand likely highest?

Business

1 answer:

Mekhanik [1.2K]4 years ago

4 0

Answer:

c. boats

Explanation:

Income elasticity of demand measures how quantity demanded responds to changes in price.

Goods that are considered necessities usually have the lowest income elasticity of demand. Therefore, the income elasticity of demand for doctors visits and natural gas would be relatively low.

The income elasticity of demand for luxury goods are usually high. Therefore, the income elasticity for boats would be high.

Goods whose price is small compared to income would have a low income elascitiy. Therefore, the income elasticity for hamburgers would be low.

I hope my answer helps you.

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