If people buy more of a generic brand when consumer income falls, it is an inferior good.

Question

If people buy more of a generic brand when consumer income falls, it is an inferior good. ​

Quizplus · Accepted Answer

This statement is true. When consumer income falls, people tend to cut back on their expenses and may switch to cheaper or generic brands, including for basic necessities like food and healthcare, which are examples of inferior goods. This is because people's purchasing power decreases and they may not be able to afford the same level of luxury or quality items as before.

If People Buy More of a Generic Brand When Consumer