If the income effect of a price change is negative and larger in absolute terms than the substitution effect,then the demand curve will be
A)of indeterminate slope.
B)downward sloping.
C)horizontal.
D)vertical.
E)upward sloping.

Question

Quizplus · Accepted Answer

If the negative income effect is larger than the substitution effect, the overall effect is that the quantity demanded increases as the price increases, leading to an upward sloping demand curve.

If the Income Effect of a Price Change Is Negative