Asked by Louie Allard on May 04, 2024
Verified
Which statement is TRUE of an inferior good?
A) When income increases,demand remains unchanged.
B) When income increases,demand decreases.
C) When income increases,demand increases.
D) Income and demand are unrelated.
Inferior Good
A type of good for which demand decreases as the income of the consumer increases.
- Discern the variations between normal and inferior goods, and evaluate how shifts in income affect their demand.
Verified Answer
PM
Philip McManamyMay 11, 2024
Final Answer :
B
Explanation :
Inferior goods are those for which demand decreases as consumer income increases, as consumers opt for more expensive substitutes.
Learning Objectives
- Discern the variations between normal and inferior goods, and evaluate how shifts in income affect their demand.