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SSC Sample Paper SSC (Group-C) Sample Test Paper-6

  • question_answer
    In the case of an inferior good, the income elasticity of demand is :

    A)  Zero                           

    B)  Negative

    C)  Infinite           

    D)       Positive

    Correct Answer: B

    Solution :

     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.


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