An inferior good is one for which
A) the compensated demand curve fails to be downward sloping.
B) higher prices have relatively little effect on the quantity demanded.
C) the income elasticity is positive but less than 1.
D) increases in income result in lower quantities demanded.

Question

Quizplus · Accepted Answer

An inferior good is one for which increases in income result in lower quantities demanded. This is because as people's income increases, they tend to switch to higher-quality alternatives, making the inferior good seem less desirable.

An Inferior Good Is One for Which