A normal good, also called a necessary good, is the opposite of an inferior good. ... A luxury good means a greater increase in income results in a larger percentage increase in demand. A normal good has an income elasticity of demand that is positive, but less than one.

Income Elasticity of Demand for Normal Goods

Definition of Normal Goods
Normal goods are those goods whose demand increases as the income of the consumer increases, ceteris paribus. In other words, normal goods have a positive income elasticity of demand (YED).

Income Elasticity of Demand (YED)
Income elasticity of demand (YED) is the measure of responsiveness of the quantity demanded to a change in the income of the consumer. It is calculated as the percentage change in the quantity demanded of a good divided by the percentage change in the income of the consumer.

Positive YED for Normal Goods
Normal goods have a positive income elasticity of demand because, as the income of the consumer increases, the consumer's ability to purchase the good also increases. This, in turn, leads to an increase in the quantity demanded of the good. For example, if a person's income increases by 10%, and the quantity demanded of a normal good increases by 5%, then the income elasticity of demand for that good is 0.5, which is positive.

Zero YED or Negative YED for Inferior Goods
Inferior goods are those goods whose demand decreases as the income of the consumer increases, ceteris paribus. Inferior goods have either zero or negative income elasticity of demand (YED). If the YED of an inferior good is zero, then the quantity demanded of the good remains constant as the income of the consumer increases. If the YED of an inferior good is negative, then the quantity demanded of the good decreases as the income of the consumer increases.

Therefore, the correct answer to the question is option 'C' - normal goods have a positive income elasticity of demand.

Normal goods have positive income elasticity because the demand of normal goods rises when income of the consumer increase and demand for goods fall when income of consumer decrease..