Suppose that consumer income increases and that ground meat is an inferior good. Which of the following will occur in the market for ground meat?
A) Market clearing price will rise, and equilibrium quantity will rise.
B) Market clearing price will fall, and equilibrium quantity will fall.
C) Market clearing price will rise, and equilibrium quantity will fall.
D) Market clearing price will fall, and equilibrium quantity will rise.

Question

Quizplus · Accepted Answer

When consumer income increases, demand for inferior goods (like ground meat) decreases because consumers tend to buy more of superior or normal goods. This decrease in demand leads to a lower market clearing price and a lower equilibrium quantity for the inferior good.

Suppose That Consumer Income Increases and That Ground Meat Is