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Question
In the case of inferior goods, the income elasticity of demand is ______.
In the case of inferior goods, the income elasticity of demand is ______.
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Solution
The correct option is C negative
In the case of inferior goods, the income elasticity of demand is negative as when the income of the consumer rises the demand for inferior good falls and when the income of the consumer falls, then the demand for inferior good rises.
In the case of inferior goods, the income elasticity of demand is negative as when the income of the consumer rises the demand for inferior good falls and when the income of the consumer falls, then the demand for inferior good rises.
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