Answered

If product Y is an inferior good, a decrease in consumer incomes will rev:
A. make buyers want to buy less of product Y.
B. shift the demand curve for product Y to the right.
C. shift the demand curve for product Y to the left.
D. not affect the sales of product Y.

Answer :

Answer: Option (B) is correct.

Explanation:

Inferior good is a good whose demand is inversely related with the consumers income. This means that if there is an increase in the income of the consumer then as a result demand for normal good increases but demand for inferior goods decreases.

On the other hand, if there is a decrease in the income of the consumer then as a result demand for normal good decreases but demand for inferior goods increases.

Hence, decrease in consumer incomes will increase the demand of product Y and the demand curve for product Y to the right.  

Other Questions