Q329
In case of inferior goods, the income elasticity is
A.
Zero
B.
Positive
C.
Negative
AnswerD.
None
Answer: Option C
Solution
Answer: Option C
Solution:
In case of inferior goods, the income elasticity is Negative. A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes.