Suppose good X has a negative income elasticity of demand.This implies that good X is
A)a normal good.
B)a necessity.
C)an inferior good.
D)a luxury.

Question

Quizplus · Accepted Answer

A negative income elasticity of demand means that as income increases, the demand for the good decreases. This is typically indicative of an inferior good, which is a good that people tend to buy less of as they become wealthier and can afford better alternatives.

Suppose Good X Has a Negative Income Elasticity of Demand