Exhibit 5-8 Supply and demand curves for good X

-As shown in Exhibit 5-8, assuming good X is an inferior good, a decrease in consumer income, other factors held constant, will move the equilibrium from point E to point:
A) X.
B) W.
C) Z.
D) Y.

Question

Exhibit 5-8 Supply and demand curves for good X
​ 
-As shown in Exhibit 5-8, assuming good X is an inferior good, a decrease in consumer income, other factors held constant, will move the equilibrium from point E to point:
A) X. 
B) W. 
C) Z. 
D) Y.

Quizplus · Accepted Answer

For an inferior good, a decrease in consumer income leads to an increase in demand. This would shift the demand curve to the right, moving the equilibrium from point E to point X.

Exhibit 5-8 Supply and Demand Curves for Good X