Whenever the price of a good alters, the change in quantity demanded is caused by an income effect and a substitution effect. Which statement about these effects is always true?
- AFor inferior goods, the income effect and substitution effect work in the same direction.
- BFor inferior goods, the substitution effect outweighs the income effect.
- CFor normal goods, the income effect and substitution effect work in the same direction.
- DFor normal goods, the income effect outweighs the substitution effect.