Something is an inferior good if the demand for the good

Question

Quizplus · Accepted Answer

An inferior good is a good for which the demand decreases as the consumer's income increases. This is because as the consumer's income increases, they tend to switch to higher quality goods and services, resulting in a decrease in demand for the inferior good. Choice A is incorrect because the demand for normal goods increases as the consumer's income increases. Choices C and D refer to changes in demand for complements and substitutes, respectively, rather than inferior goods. Choice E is partly correct but incomplete, as it only considers the decrease in demand for inferior goods with decreasing income, whereas the definition of an inferior good includes the inverse relationship between demand and income.

Something Is an Inferior Good If the Demand for the Good