Which of the following statements best describes an inferior good?
A) An inferior good is a good whose quantity supplied always exceeds its quantity demanded.
B) An inferior good is a good whose demand decreases with an increase in consumers' income.
C) An inferior good is a good that is sold at a subsidized price.
D) An inferior good is a good that is rationed by the government.

Question

Quizplus · Accepted Answer

An inferior good is a good whose demand decreases with an increase in consumers' income. This is because as consumers' income rises, they tend to switch to higher-quality or more expensive goods, causing a decrease in demand for the inferior good. Examples of inferior goods include store-brand groceries, fast food, and used cars.

Which of the Following Statements Best Describes an Inferior Good