When income rises by 2 percent and other things remain the s

When income rises by 2 percent and other things remain the same, the quantity demanded of good C increases by I percent. Good C is good and as income rises. the demand for good C The income elasticity of demand for good C

Solution

Income elasticity of demand is (%change in quantity demanded )/ (% change in income)

Income elasticity of demand =1%/2%=0.5

Since elasticity is positive,so quantity demanded increases with increase in income

hence C is a normal good because for normal goods Quantity demanded rises with rise in income

So correct option is E.