What is the effect of a rise in income on the demand for a product?
A)It will rise if the product is an inferior product.
B)It will rise if the product is a normal product.
C)It will fall if the product is a normal product.
D)It will fall in both cases of a normal or inferior product.

Question

Quizplus · Accepted Answer

A rise in income usually leads to an increase in demand for normal products because consumers have more purchasing power. The demand for inferior products, on the other hand, may decrease as consumers switch to higher-quality alternatives. Therefore, the demand for a product will rise if it is a normal product.

What Is the Effect of a Rise in Income on the Demand