An inferior good is one for which demand increases as
A)price decreases
B)price increases
C)income increases
D)income decreases
E)the price of a related good decreases

Question

Quizplus · Accepted Answer

An inferior good is a good for which demand decreases as income increases. In other words, people only buy inferior goods because they cannot afford better ones. Therefore, if income decreases and people have less money to spend, they will switch to buying inferior goods instead of more expensive alternatives. This means that demand for inferior goods increases as income decreases, making D the correct answer.

An Inferior Good Is One for Which Demand Increases as