If the income elasticity of demand for a good is negative, this implies that
A) only the poor will buy the good.
B) as incomes fall, less will be spent on the good.
C) as incomes rise, the demand for the good will fall.
D) the good does not obey the law of demand.

Question

Quizplus · Accepted Answer

A negative income elasticity of demand indicates that the good is an inferior good, meaning that as incomes rise, the demand for the good will fall.

If the Income Elasticity of Demand for a Good Is