Figure 3.7
-Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for used movie tickets, an inferior good.Which panel describes what happens in this market as a result of a decrease in income?
A)Panel (a)
B)Panel (b)
C)Panel (c)
D)Panel (d)

Question

Figure 3.7 
-Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for used movie tickets, an inferior good.Which panel describes what happens in this market as a result of a decrease in income?
A)Panel (a) 
B)Panel (b) 
C)Panel (c) 
D)Panel (d)

Quizplus · Accepted Answer

Panel (c) illustrates what happens in the market for an inferior good, like used movie tickets, when there is a decrease in income. In this scenario, the demand for the inferior good increases (the demand curve shifts to the right) because people have less income and are more likely to buy cheaper alternatives.

Figure 3.7 -Refer to Figure 3.7.Assume That the Graphs in This Figure