The correct answer is B.
Income elasticity of demand is a measure of how much the quantity demanded of a good or service changes in response to a change in income. It is calculated as the percentage change in the quantity demanded divided by the percentage change in income.
A negative income elasticity of demand indicates that the quantity demanded of a good or service falls when income rises. This is because the good or service is considered to be a “normal good”. Normal goods are goods that people demand more of when their income rises.
For example, if a person’s income rises, they may decide to buy a new car. However, if their income falls, they may decide to keep their old car and save their money.
The other options are incorrect. Option A is incorrect because a negative income elasticity of demand indicates that the quantity demanded falls when income rises. Option C is incorrect because a negative income elasticity of demand indicates that the quantity demanded falls when income rises.
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