Q79
In the case of an inferior good, the income elasticity of demand is
A.
Positive
B.
Zero
C.
Negative
AnswerD.
Infinite
Answer: Option C
Solution
Answer: Option C
Solution:
In the case of an inferior good, the income elasticity of demand 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.