For the same sized substitution effect, own-price demand curves for inferior goods are steeper than own price demand curves for normal goods.

Question

Quizplus · Accepted Answer

This is because the substitution effect is stronger for inferior goods. As the price of an inferior good increases, consumers are more likely to switch to a higher quality substitute, whereas for a normal good, consumers may not have as many substitutes available and may be more willing to pay a higher price.

For the Same Sized Substitution Effect, Own-Price Demand Curves for Inferior