If a decrease in income results in an increase in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A) a normal good; positive
B) a normal good, negative
C) an inferior good; positive
D) an inferior good; negative

Question

Quizplus · Accepted Answer

If a decrease in income leads to an increase in the quantity demanded, the product is considered an inferior good. This is because consumers turn to cheaper alternatives when their income decreases. The income elasticity of demand for inferior goods is negative, indicating that demand moves inversely to income changes.

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