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In the case of an inferior good, the income elasticity of demand is :
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- Zero
- Negative
- Infinite
- Positive
- Zero
Correct Option: B
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
