If the income elasticity of demand for a good is -2.5,then
A)it is a normal good,and its demand curve will shift to the left if buyers' incomes increase
B)it is a normal good,and its demand curve will shift to the right if buyers' incomes increase
C)it is an inferior good,and its demand curve will shift to the right if buyers' incomes increase
D)it is an inferior good,and its demand curve will shift to the left if buyers' incomes increase
E)there is insufficient information to determine whether the good is normal or inferior

Question

Quizplus · Accepted Answer

A negative income elasticity of demand indicates that the good is an inferior good. In this case, as buyers' incomes increase, their demand for the good will decrease, causing the demand curve to shift to the left.

If the Income Elasticity of Demand for a Good Is