Economics 9708 · AS & A Level · Price elasticity of demand

Price elasticity of demand — practice question

Which statement correctly explains the effect of a price rise on an inferior good?

  • ABoth the substitution effect and the income effect cause the consumer to buy less of the good.
  • BBoth the substitution effect and the income effect cause the consumer to buy more of the good.
  • CThe substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.
  • DThe substitution effect causes the consumer to buy more of the good and the income effect causes the consumer to buy less of the good.

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