An inferior good is a good for which demand decreases as the income of the consumer increases and the relative prices remain constant.

Question

Quizplus · Accepted Answer

This is the definition of an inferior good. As people's income increases, they are more likely to buy higher quality goods, which leads to a decrease in demand for lower quality goods. This is the opposite of a normal good, for which demand increases as income increases.

An Inferior Good Is a Good for Which Demand Decreases