When a large factory closed in the town of Greenville, income fell for many residents. As a result, demand for normal goods would _____ and demand for inferior goods would _____.

Question

Quizplus · Accepted Answer

When income falls, demand for normal goods decreases because people have less money to spend. Conversely, demand for inferior goods increases as people look for cheaper alternatives.

When a Large Factory Closed in the Town of Greenville