Multiple Choice
Which of the following correctly describes the result of a price increase for an inferior good?
A) Both the substitution effect and the income effect cause the consumer to buy less of the good.
B) The substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.
C) The substitution effect causes the demand for the good to decrease; the income effect causes the demand for the good to increase.
D) The substitution effect causes the demand for the good to increase; the income effect causes the demand for the good to decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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