Kizspy | Question: 43
(Choose 1 answer)
Which of the following statements is correct?
A. When a consumer experiences a price increase for an inferior good, it is possible that the income effect is greater than the substitution effect, and the demand curve will be downward sloping.
B. When a consumer experiences a price increase for an inferior good, it is possible that the income effect is greater than the substitution effect, and the demand curve will be upward sloping.
C. When a consumer experiences a price increase for an inferior good, it is possible that the income effect is less than the substitution effect, and the demand curve will be upward sloping.
D. When a consumer experiences a price increase for an inferior good, it is possible that the income effect is less than the substitution effect but that the substitution effect is positive, and the demand curve will be upward sloping.
