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Question
In the case of an inferior goods, the income elasticity of demand is?
In the case of an inferior goods, the income elasticity of demand is?
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Solution
The correct option is A Negative
There is an inverse relationship between the demand for inferior goods
and the income of consumer. Thus the income elasticity of demand for
inferior goods is negative.
There is an inverse relationship between the demand for inferior goods and the income of consumer. Thus the income elasticity of demand for inferior goods is negative.
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