If an increase in income leads to an decrease in the demand for salami,then salami is
A)an inferior good.
B)a neutral good.
C)a necessity.
D)a normal good.

Question

Quizplus · Accepted Answer

If an increase in income leads to a decrease in the demand for a good, it is known as an inferior good. This usually happens when consumers switch to higher-priced alternatives as their income rises. In this case, salami is an example of an inferior good because consumers tend to switch to more expensive and higher-quality food items when they have more disposable income.

If an Increase in Income Leads to an Decrease in the Demand