When the Price of a Product Rises for an Inferior

question 19

Multiple Choice

When the price of a product rises for an inferior good, the

• A) income and substitution effects will encourage consumers to purchase more of the product.
• B) income and substitution effects will encourage consumers to purchase less of the product.
• C) substitution effect will encourage consumers to purchase less of the product, but the income effect will encourage them to purchase more.
• D) substitution effect will encourage consumers to purchase more of the product, but the income effect will encourage them to purchase less.