If a Good Is an Inferior Good and Its Price

Multiple Choice

If a good is an inferior good and its price decreases, the income effect:

A) and the substitution effect work in the same direction to increase quantity demanded.
B) and the substitution effect cancel each other out, and there is no change in quantity demanded.
C) has a stronger and positive effect on quantity demanded than the substitution effect.
D) has a negative effect on quantity demanded, but typically the substitution effect tends to dominate the income effect, resulting in an increase in quantity demanded.