A product that has a negative income elasticity of demand is ________ good.
A) a complementary
B) a substitute
C) a normal
D) an inferior
E) a negative

Question

Quizplus · Accepted Answer

A product that has a negative income elasticity of demand is an inferior good. This means that as income increases, the demand for the product decreases, showing that it is typically a lower-quality or less desirable product. Examples of inferior goods can include generic or store-brand products, public transportation, and discount clothing.

A Product That Has a Negative Income Elasticity of Demand