When a consumer experiences a price increase for an inferior good,it is possible that the income effect is
A)greater than the substitution effect and the demand curve will be downward sloping.
B)greater than the substitution effect and the demand curve will be upward sloping.
C)less than the substitution effect and the demand curve will be upward sloping.
D)less than the substitution effect but the substitution effect is positive and the demand curve will be upward sloping.

Question

Quizplus · Accepted Answer

For an inferior good, if the income effect is greater than the substitution effect, the consumer may buy more of the good when its price increases, leading to an upward sloping demand curve.

When a Consumer Experiences a Price Increase for an Inferior