A low-fat decaf vanilla latte is more likely to be an inferior good than coffee in general because:
A)the demand for low fat coffees is generally low.
B)as prices go up,the demand for low-fat decaf vanilla lattes decreases.
C)it is a relatively narrowly defined category of coffee.
D)the price of coffee is negatively correlated to its price.

Question

Quizplus · Accepted Answer

Inferior goods are those for which demand decreases as consumer income increases, often because consumers will opt for higher-quality or more desirable alternatives. A low-fat decaf vanilla latte is a very specific type of coffee, making it more susceptible to changes in consumer preferences as their income changes. People might switch to more premium or fuller-featured coffee drinks as they have more disposable income, making the narrowly defined category more likely to be considered an inferior good compared to coffee in general, which encompasses a wide range of types and qualities.

A Low-Fat Decaf Vanilla Latte Is More Likely to Be