If the substitution effect is partly or fully offset by the income effect,we know that the good in question is a(n)
A)complementary good.
B)inferior good.
C)luxury good.
D)normal good.

Question

Quizplus · Accepted Answer

If the income effect offsets the substitution effect, we can conclude that the consumer will purchase less of the good as their income increases, indicating that the good is an inferior good.

If the Substitution Effect Is Partly or Fully Offset by the Income