When violation of law of demand occurs:

CA Foundation · Business Economics · MTP · January 2026
When violation of law of demand occurs:
(A) A. Substitution effect is negative
(B) B. Income effect is negative
(C) C. Negative income effect is less than substitution effect
(D) D. Negative income effect is greater than substitution effect

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Negative income effect is greater than substitution effect

Topics: Theory of Demand and Supply

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