Can a good have both a downward-sloping Engel curve and a downward-sloping demand curve? Why or why not?

Can a good have both a downward-sloping Engel curve and a downward-sloping demand curve? Why or why not?

 

Answer:

A downward-sloping Engel curve implies an inferior good. An inferior good is one whose demand falls as income increases .The demand curve for an inferior good is downward sloping indicating that demand falls as income increases . There will be a fall in demand because customers will react to an increase in income by purchasing products which are perceived to be of better quality .

Thus an inferior good can have both a downward-sloping Engel curve and a downward-sloping demand curve.

Asked on February 15, 2018 in economics.
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