As cities prospered and per-capita incomes increased, the demand for bus travel diminished. This suggests that:
A) cities could raise revenue by increasing bus fares.
B) the demand for bus travel is price elastic.
C) bus travel and automobile travel are complements.
D) bus travel is an inferior good.

Question

Quizplus · Accepted Answer

Bus travel is considered an inferior good because the demand for it decreases as per-capita incomes increase, indicating that people opt for other modes of transportation when they can afford to.

As Cities Prospered and Per-Capita Incomes Increased, the Demand for Bus