Asked by
JAED L LUCENA-SANTANA
on Nov 17, 2024Verified
If the income elasticity of demand for a good is negative, then the good must be an inferior good.
Income Elasticity
A measure of how much the demand for a good or service changes in response to a change in the consumer's income.
Inferior Good
A type of good for which demand decreases as the income of the consumer increases, opposite to normal goods.
Negative
In the context of economics, denotes a situation or indicator that reflects a decrease, deficit, or detrimental condition.
- Differentiate between standard and substandard goods by utilizing the income elasticity of demand.
Verified Answer
AN
Learning Objectives
- Differentiate between standard and substandard goods by utilizing the income elasticity of demand.