[amp_mcq option1=”Zero” option2=”Positive” option3=”Negative” option4=”nan” correct=”option3″]<\/p>\n
The correct answer is C. Negative.<\/p>\n
Income elasticity of demand is a measure of how much the demand for a good or service changes in response to a change in income. For inferior goods, the demand decreases as income increases. This is because as people earn more money, they tend to switch to more expensive goods and services. For example, if you are poor, you might buy a lot of ramen noodles. But if you become rich, you are more likely to buy steak instead.<\/p>\n
Option A is incorrect because the income elasticity of demand for inferior goods is not zero. Option B is incorrect because the income elasticity of demand for inferior goods is negative. Option D is incorrect because there is a correct answer.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Zero” option2=”Positive” option3=”Negative” option4=”nan” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-52368","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n