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

Assessment: WAEC SSCE - Economics - 2011 (Objective) Subject: Economics

Question 1 Report

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

Answer Details
The coefficient of income elasticity of demand for inferior goods is negative. This is because when consumers' income increases, they tend to buy less of the inferior goods and switch to buying better alternatives, causing the demand for inferior goods to decrease. The negative sign indicates the inverse relationship between income and demand for inferior goods.
Read lesson note on The Theory Of Consumer Behaviour (JAMB)
Read lesson note on The Theory Of Demand (JAMB)
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