Suppose that good X has a negative income elasticity of demand.What does this imply about the good
A)It is a normal good.
B)It is a necessity.
C)It is an inferior good.
D)It is a luxury.

Question

Quizplus · Accepted Answer

If a good has a negative income elasticity of demand, it means that as income increases, the demand for the good decreases. This is typical of inferior goods, which are goods for which demand decreases as income increases.

Suppose That Good X Has a Negative Income Elasticity of Demand.What