3.4 Market Effects of Changes in Demand
Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Question

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Quizplus · Accepted Answer

For an inferior good, an increase in income leads to a decrease in the quantity demanded. This is represented by a shift from a higher demand curve (D₂) to a lower one (D₁), indicating that people are buying less of the inferior good as their income increases.