Income elasticity of demand for inferior goods is ________. (positive / negative / zero / greater than one), Fill in the blank with appropriate alternative given in the bracket.
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income elasticity of demand for inferior Good is negative
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Income elasticity of demand for inferior goods is negative.
Explanation:
- Goods having direct relationship with price but the inverse relationship with income is called inferior goods.
- The demand for inferior goods increases with an increase in price and decreases with a rise in income.
- The elasticity of income is negative but less than zero. An inferior good is against the normal good that experiences a higher demand also with higher profit level.
Learn more about inferior goods:
A piece of good is a inferior good for one and at the same time normal good for another consumer. explain
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