Question

A firm knows that Seneca's income elasticity of demand for hair ties is 5; for Janelle, it is 0.2. A firm can reason thatla hair tie is a(n) _ _good for Seneca while it is a(n)_good for Janelle. A. inferior; normal B. complement; substitute C. necessity; luxury D. normal; inferior E. luxury; necessity

Answer 1

Answer: E. luxury; necessity

Step-by-step explanation:

Income elasticity of demand is a measure of how the demand for a good or service change when people's income changes. It the ratio of the percentage change in quantity demanded to the percentage change in income.