In Figure 2-24, if a good is inferior and income falls, which of the following will result? A)a shift from D₁ to D₃ B)a shift from S₁ to S₃ C)a shift from D₁ to D₂ D)a shift from S₁ to S₂

Question

Quizplus · Accepted Answer

If a good is inferior, a decrease in income will actually increase demand for the good. Therefore, the demand curve will shift to the right (from D₁ to D₃) while the supply curve remains the same. This is represented by option A.

In Figure 2-24, If a Good Is Inferior and Income