If income increases and the demand for bus rides decreases,
A) bus rides are a normal good.
B) consumers are behaving irrationally.
C) bus rides are an inferior good.
D) bus rides are a substitute good.
E) bus rides must be a complement good with some other good.

Question

Quizplus · Accepted Answer

This scenario suggests that bus rides are an inferior good, meaning that as income increases, consumers switch to alternatives like cars or taxis. This is different from a normal good, where demand actually increases as income increases.

If Income Increases and the Demand for Bus Rides Decreases