If a Good Is an Inferior Good and Its Price

Multiple Choice

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

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