If an increase in income results in a decrease in the quantity demanded of a good,then for that good,the
A)cross-price elasticity of demand is negative.
B)price elasticity of demand is elastic.
C)income elasticity of demand is negative.
D)income elasticity of demand is positive.

Question

Quizplus · Accepted Answer

This scenario suggests that the good is an inferior good, which means as income rises, the quantity demanded of the good decreases. This in turn means that the income elasticity of demand is negative.

If an Increase in Income Results in a Decrease in the Quantity