Final answer:
During an economic boom with rising incomes, luxury goods would likely experience increased sales, while inferior goods would see a decline in demand. This makes businesses selling luxury goods best positioned to capitalize on the increased consumer purchasing power.
Step-by-step explanation:
When predicting a boom in the economy and an increase in average income, the types of products that would likely see increased sales are those whose demand is positively correlated with income levels. Specifically, luxury goods such as luxury cars, exotic vacations, and fine jewellery have a demand that rises when income rises; these items are known as normal goods. Conversely, inferior goods, like generic brand groceries and used cars, tend to see a fall in demand as incomes rise because consumers begin purchasing more premium or upgraded versions of those goods.
In the context of the question, the business sector that would likely experience increased sales with rising income levels would be option A: one that sells a luxury good. Businesses trading in necessities or price inelastic goods might see steady sales due to the constant demand, regardless of income. However, those dealing with inferior goods could see a decrease in sales as consumers shift towards higher-end products.