As income rises,the demand for inferior goods

A) rises.
B) falls.
C) stays about the same.
D) cannot be determined.

Question

As income rises,the demand for inferior goodsA) rises.B) falls.C) stays about the same.D) cannot be determined.

Nicholas Biggerstaff · Accepted Answer

Final Answer : B, Explanation :  The demand for inferior goods falls as income rises. Inferior goods are those for which the demand decreases with an increase in income. Examples of inferior goods include low-quality substitutes for higher-quality goods (e.g. instant noodles instead of a more expensive meal) or products that are purchased out of necessity but would be replaced with a superior good if income allowed (e.g. basic clothing instead of designer clothes). As income rises, consumers are able to afford better-quality goods and will therefore choose to purchase them instead.

As income rises,the demand for inferior goods

A) rises.
B) falls.
C) stays about the same.
D) cannot be determined.

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