During the recession, Wal-Mart moved its pet food and supplies to in front of its other fast growing business, baby products. Retail experts point out that kids and pets tend to be fairly recession-resistant businesses—even in a recession, dogs will be fed and kids will get their toys.
a. What does this news clip imply about the income elasticity of demand for pet food and baby products?
b. Would the income elasticity of demand be greater or less than 1? Explain.