If income increases, and the demand for a luxury good rises, this indicates what type of good?

The correct response indicates that a luxury good is classified as a normal good. Normal goods are those for which demand increases as consumer income rises. In this scenario, as people's income increases, they have more disposable income to spend on luxury items, resulting in heightened demand for these goods.

This relationship is based on the tendency of consumers to buy more of certain products when they can afford to. Luxury items are often seen as desirable and indicative of higher social status, which drives their consumption in response to increased income. Therefore, the observed increase in demand when income rises clearly identifies the luxury good as a normal good.

Other classifications of goods, such as inferior goods, would see a decrease in demand as consumer income rises, while complementary and substitute goods pertain to different relationships related to demand fluctuations based on the prices of other goods rather than direct changes in income.