Question

For an inferior good an increase in income causes a (an)
(a) Decrease in supply
(b) Decrease in demand
(c) Increase in supply
(d) Increase in demand​

Answer 1

Answer:

An inferior good occurs when an increase in income causes a fall in demand. An inferior good has a negative income elasticity of demand. (YED) Inferior goods are characterised by low quality – and are goods with better alternatives.

(B) decrease in demand

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