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irakobra [83]
3 years ago
12

If the income elasticity of demand for a good is negative, it must be

Advanced Placement (AP)
2 answers:
Iteru [2.4K]3 years ago
8 0

Answer:inferior good

Explanation:for inferior good, less is preferred to more so as income increases it's consumption decreases

Oksana_A [137]3 years ago
5 0

If the income elasticity of demand for a good is negative, it must be an inferior good.

<u>Explanation:</u>

The income elasticity of demand, in economics, measures the quantity that is demanded for a good to a change in its income. Goods whose demand falls as income rises is known as an inferior good. Such inferior goods have a "negative income elasticity of demand".

Public transportation like an "intercity bus is an example of an inferior good" or service where due to low income, the consumer has to travel by bus but if the economy grows and the consumer income increases, consumers buy cars instead of traveling by bus.

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