Suppose the demand curves for goods A,B,and C have the following functional forms,where Q denotes quantity demanded,P denotes price,and M denotes income: Q_A = 120 - 3.5P_A - 6P_B + 14M
Q_B= 100 - 2P_B + 3P_C + 1.1M
Q_C = 1500 - 0.5P_C - 300M.
Based on these demand curves,which of the following goods are known to be inferior goods?

Question

Quizplus · Accepted Answer

A good is considered inferior if its demand decreases when income increases. From the demand function for good C, we can see that as income increases, the quantity demanded decreases, indicating that good C is an inferior good. The demand functions for goods A and B do not have a clear negative relationship between income and quantity demanded, so they cannot be classified as inferior goods.

Suppose the Demand Curves for Goods A,B,and C Have the Following