An increase in the price of an inferior good makes the people who consume that good better off.

Question

Quizplus · Accepted Answer

An inferior good is a type of good for which demand decreases as income increases. Examples of inferior goods include bus travel, instant noodles, and second-hand clothes. When the price of an inferior good increases, people will tend to look for alternatives (superior goods) that provide higher levels of satisfaction, which will generally make them better off. Therefore, an increase in the price of an inferior good will make the people worse off, not better off.

An Increase in the Price of an Inferior Good Makes