A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume:
A) macaroni is a normal good and price elasticity of demand is greater than 1.
B) macaroni is an inferior good and price elasticity of supply is equal to zero.
C) macaroni is an inferior good and price elasticity of supply is infinite.
D) macaroni is an inferior good and price elasticity of demand is less than 1.

Question

Quizplus · Accepted Answer

Macaroni and cheese is an inferior good because demand decreases as income increases. The price elasticity of supply being infinite suggests that the price remains constant regardless of changes in demand.

A 10 Percent Increase in Income Leads to a 15