If the income elasticity of a good is negative, we can conclude that the good is
A) an inferior good.
B) a normal good.
C) a luxury good.
D) a necessity.

Question

Quizplus · Accepted Answer

A negative income elasticity indicates that as income increases, the demand for the good decreases. This is characteristic of an inferior good, which are goods for which demand decreases as income increases.

If the Income Elasticity of a Good Is Negative, We