The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-When the income elasticity of demand for a good is negative, one can correctly conclude that:
A)the good is a normal good.
B)the good is an inferior good.
C)the good is a substitute.
D)the good is a complement.
E)total revenue will decrease when the price increases.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-When the income elasticity of demand for a good is negative, one can correctly conclude that:
A)the good is a normal good. 
B)the good is an inferior good. 
C)the good is a substitute. 
D)the good is a complement. 
E)total revenue will decrease when the price increases.

Quizplus · Accepted Answer

A negative income elasticity of demand means that as income increases, the quantity demanded of the good decreases. This is characteristic of inferior goods, which are goods that people tend to buy less of as their income rises and they can afford to buy better substitutes.

The Figure Given Below Shows the Demand Curves for Five