A negative income elasticity of demand for a commodity indicates that as income falls the amount of the commodity purchased ________.

rises

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

falls

No worries! We‘ve got your back. Try BYJU‘S free classes today!

remains unchanged

No worries! We‘ve got your back. Try BYJU‘S free classes today!

any of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A rises
Negative income elasticity of demand states that increase in income leads to the fall in quantity of interior goods. Inferior goods or services exist where superior goods are available if the consumer has the money to be able to buy it.

Suggest Corrections

Similar questions

Q. The income elasticity of demand being greater than one, the commodity must be a _______.

When the quantity demanded of a commodity increases with increase in income and decreases with decrease in income, the income elasticity of demand will be

Q. An income-demand curve for a 'luxury commodity' slopes _____________.

Q. A consumer purchased 10 units of a commodity when its price was Rs 5 per unit. He purchases 12 units of the commodity when price falls to Rs 4 per unit. Calculate the price elasticity of demand for the commodity.

Q. a) The income effect is positive only in the case of a superior commodity
b) The income effect is negative in the case of an inferior commodity

Join BYJU'S Learning Program

A negative income elasticity of demand for a commodity indicates that as income falls the amount of the commodity purchased ________.

The correct option is A risesNegative income elasticity of demand states that increase in income leads to the fall in quantity of interior goods. Inferior goods or services exist where superior goods are available if the consumer has the money to be able to buy it.

The correct option is A rises
Negative income elasticity of demand states that increase in income leads to the fall in quantity of interior goods. Inferior goods or services exist where superior goods are available if the consumer has the money to be able to buy it.