Income Elasticity Exceeds 1 for Biscuits

Steps:

• Identify changes in quantity demanded and income from the table across the income range.
• Compute percentage change in biscuit quantity demanded divided by percentage change in income.
• Repeat for coffee to compare elasticities.
• Classify: elasticity >1 indicates luxury good for biscuits.

Why A is correct:

• Income elasticity = (%Δ quantity biscuits) / (%Δ income) >1, as biscuit consumption rises faster than income, per the definition of elastic demand for normal goods.

Why the others are wrong:

• B: Elasticity >0 (positive for normal good), not zero (inferior good trait).
• C: Coffee elasticity =1 (unitary), not <1 (necessity good).
• D: Coffee shows unitary elasticity (proportional changes), not matching the choice's implication.

Final answer: A