I understand elasticity in general to be interpreted as …If some item (income, price…so on) were to change by a certain amount, demand would change more if elastic and change less in inelastic.
by that understanding a normal good would have positive elasticity or positive inelasticity in regards to income elasticity of demand. As income increases demand will also increase more or less. I understand a value between -1 and 1 to be inelastic and greater than 1 and less than -1 to be elastic. In other words, I think a normal good would have any positive value for it’s income elasticity of demand
However investopedia had this to say (paraphrased)
…if the income elasticity of demand is between 0 and 1 the good is considered normal.
but wait, that is saying that a normal good can only be positive income inelastic. why say the elasticity cant be over 1? Why can’t a normal good be positive income elastic. ?
who is right, me or investopedia?