If an increase in income results in a decrease in the quantity demanded of a good,then for that good,
A)the cross-price elasticity of demand is negative.
B)the price elasticity of demand is negative.
C)the income elasticity of demand is negative.
D)an increase in the market supply will increase the equilibrium price of the good.

Question

Quizplus · Accepted Answer

This scenario is describing an inferior good, for which the income elasticity of demand is negative. As income increases, consumers switch to higher quality or more desirable goods, resulting in a decrease in quantity demanded for the inferior good. The other options are not applicable in this scenario.

If an Increase in Income Results in a Decrease in the Quantity