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

Question

Quizplus · Accepted Answer

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

If the Demand for a Product Has an Income Elasticity