If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A)an income elastic good.
B)an inferior good.
C)a necessity.
D)a luxury good.

Question

Quizplus · Accepted Answer

A 5 percent increase in income should lead to an increase in the quantity demanded of a normal good. However, in this case, there is a 10 percent decrease in quantity demanded which means this product is an inferior good.

If a 5 Percent Increase in Income Leads to a 10