If the demand for a product has an income elasticity of - 3.4,we can conclude that
A)a decrease in income will lead to an increase in demand for the product.
B)the product has a rising income- consumption curve.
C)the product is a normal good.
D)an increase in income will lead to an increase in demand for the product.
E)the product is certainly a necessity.

Question

Quizplus · Accepted Answer

A negative income elasticity of demand indicates that the product is an inferior good, meaning that as income decreases, the demand for the product increases.

If the Demand for a Product Has an Income Elasticity