In case of an inferior good, the effect of change in buyer's income on its demand is __________
The effect is negative: demand for an inferior good falls as the buyer's income rises, other things remaining unchanged. Its income elasticity of demand is therefore negative.
Choose your answer
In case of an inferior good, the effect of change in buyer's income on its demand is __________
Answer and explanation
Correct answer A
The effect is negative: demand for an inferior good falls as the buyer's income rises, other things remaining unchanged. Its income elasticity of demand is therefore negative.
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Madhya Pradesh SET (MP SET)