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WAEC Economics 2011 Question 6

Question 6

Elasticity

The co-efficient of income elasticity of demand for inferior goods is

  1. A.positive.
  2. B.equal to one.
  3. C.less than one.
  4. D.negative.
Show the answer and explanation

Answer: D (negative.)

Explanation

Demand for inferior goods falls as income rises, so income elasticity is negative.