If the income elasticity of demand is negative,this means that the good is
A)an inferior good
B)sold at a lower than equilibrium price
C)provided by a monopoly producer
D)provided by competitive producers
E)a normal good

Question

Quizplus · Accepted Answer

A negative income elasticity of demand indicates that an increase in income leads to a decrease in demand for the good. Inferior goods are those for which demand decreases as income increases, so a negative income elasticity is a characteristic of inferior goods.

If the Income Elasticity of Demand Is Negative,this Means That