Economics · Income Elasticity of Demand

Which of the following statements correctly describe the classifications of various goods based on their Income Elasticity of Demand (YED)? A. For luxury or superior goods, the income elasticity of demand is greater than one, meaning demand grows faster than income. B. Normal necessities are characterized by a negative income elasticity of demand because consumption is independent of purchasing power. C. Inferior goods have a negative income elasticity of demand as consumers switch to higher-quality substitutes as they become more affluent. D. For perfectly income inelastic goods, such as salt, the income elasticity of demand is zero, meaning quantity demanded is unresponsive to income changes. Choose the most appropriate answer from the options given below: