Question

Describe the impact of rise in income on normal goods and inferior goods.

Answer 1

Answer:

Normal goods are those, that experiences a rise in demand with the increase in the income of the customer.

Inferior goods are those that experiences a decrease in demand with the increase in the income of the customer, beyond a specific level.

Hence, the demand of normal good is directly proportional with the customer's income and the demand of inferior good is inversely proportional to the customer's income.

Answer 2

When income increases people buy a lot normal goods. But when price of inferior goods falls then people will purchase less of those goods and they would look to buy the substitution goods

Explanation:

• In economics it is seen that the demand for inferior goods decreases as income increases and it is linked to negative income elasticity and normal goods are linked with positive income elasticity.
• When income increases then demand for normal goods   increases with an increase in income.There is a positive income effect in the case of normal goods.
• When incomes  levels are  low then the inferior goods are more affordable substitute for the expensive goods

To know more about Inferior goods

Explain why all giffen goods are inferior goods but all inferior goods are not giffen goods

https://brainly.in/question/1681325