A good is defined as an inferior good when:
A) the average consumer does not generally choose to consume this good
B) an increase in income decreases consumption of the good
C) an increase in income increases consumption of the good
D) the good is not equally valued by all consumers

Question

Quizplus · Accepted Answer

An inferior good is defined as a good whose demand decreases as income increases. This means that when incomes rise, consumers switch to better alternatives, thus causing a decrease in consumption of this good. Therefore, option B is the correct answer.

A Good Is Defined as an Inferior Good When