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Economics miscellaneous

  1. For an inferior good, demand falls when
    1. price rises
    2. income rise
    3. price falls
    4. income falls
Correct Option: B

In economics, income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the people demanding the good. An Inferior good is a good that decreases in demand when consumer income rises, unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases.



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