If a good has a negative income elasticity of demand, this indicates that the good is
A)a substitute with another good.
B)a complement with another good.
C)inferior.
D)normal.

Question

Quizplus · Accepted Answer

A negative income elasticity of demand means that as income increases, demand for the good decreases. This is characteristic of inferior goods, which are goods for which demand decreases as income increases because consumers switch to higher-quality substitutes.

If a Good Has a Negative Income Elasticity of Demand