If a good has negative income elasticity, then it is an inferior good.

Name: If a good has negative income elasticity, then it is an inferior good.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Negative income elasticity means that as income increases, demand for the good decreases. This is characteristic of inferior goods, which are cheaper alternatives that people tend to switch to when they have higher incomes and can afford better goods.

If a Good Has Negative Income Elasticity, Then It Is