From the fact that the income elasticity of demand

Reference no: EM131000626

Suppose Air France is currently charging $600 per ticket, airfare from JFK to LHR is $500 round-trip (its initial value), and the average hotel room rate in Paris is $150 per night (its initial value). If average incomes were to increase by approximately 10%, from $50,000 to $55,000 per year, the quantity of tickets demanded would increase from 1,500 to 1,521 per night, an increase of approximately 1.4%; therefore, the income elasticity of demand is about 0.14. From the fact that the income elasticity of demand is _____, we may conclude that tickets on Air France are ______.

		A. Less than 1; an inferior good
		B. Positive; a normal good
		C. Positive; an inferior good
		D. Less than 1; a normal good

Reference no: EM131000626

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