An Inferior Good Has an Income Elasticity of Demand That

question 120

Multiple Choice

An inferior good has an income elasticity of demand that is

• A) positive.
• B) negative.
• C) positive but less than 1.
• D) zero.

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Definitions:

Cournot Duopolists

Two firms competing in the same market, where each chooses its quantity of output independently and simultaneously, anticipating the other's choice.

Imports

Goods or services brought into a country from abroad for sale.

Inverse Demand

A mathematical representation of demand that expresses price as a function of quantity demanded, typically showing how the price will adjust to achieve market equilibrium.

Cournot Duopolists

Firms in a duopoly (a market with only two producers) following Cournot competition, where each firm decides its production level assuming the other's decision as given.