Ceteris paribus,a 10 percent increase in income results in a 50 percent decline in the quantity of potatoes purchased.This implies potatoes can be categorized as _____.
A)complements
B)substitutes
C)inferior goods
D)normal goods
E)luxurious goods

Question

Quizplus · Accepted Answer

The decrease in the quantity of potatoes purchased as income increases suggests that potatoes are an inferior good. This means that as income increases, people start buying less of the good and switch to buying more expensive, higher quality substitutes.

Ceteris Paribus,a 10 Percent Increase in Income Results in a 50