When a consumer experiences a price increase for a strongly inferior good, it is possible that the:
A) demand curve will be upward-sloping
B) supply curve will be downward-sloping
C) income effect will not occur
D) budget constraint will rotate outward from the origin

Question

Quizplus · Accepted Answer

A strongly inferior good is one where as a consumer's income increases, the demand for the good decreases. Therefore, if the price of the good increases, the demand for the good may not decrease as much as it would for a normal good or a luxury good, leading to an upward-sloping demand curve. This is because the consumer may still prefer the inferior good over more expensive alternatives.

When a Consumer Experiences a Price Increase for a Strongly