Asked by oscar figueroa on Sep 24, 2024
Verified
An increase in income causes the demand for inferior goods to_____________ and the price of inferior goods to ____________.
A) Increase;increase
B) Increase;decrease
C) Decrease;increase
D) Decrease,decrease
Inferior Goods
Goods whose demand decreases when consumers' income increases. They are the opposite of normal goods, which see increased demand with higher income.
Income Increase
A rise in the amount of money received, especially by workers or businesses, over a specific period.
- Compare and contrast superior goods against inferior goods, taking into account how changes in income levels dictate their demand.
Verified Answer
PE
Paige Ebert7 days ago
Final Answer :
D
Explanation :
An increase in income causes the demand for inferior goods to decrease because consumers start buying more of superior or normal goods instead. As demand decreases, the price of inferior goods also tends to decrease due to lower demand.
Learning Objectives
- Compare and contrast superior goods against inferior goods, taking into account how changes in income levels dictate their demand.