An inferior good is one in which
A)the average consumer chooses not to consume.
B)the good is not equally valued by all consumers.
C)an increase in income increases consumption of the good.
D)an increase in income decreases consumption of the good.

Question

Quizplus · Accepted Answer

An inferior good is a good for which an increase in income leads to a decrease in demand. This is because as consumers' income increases, they are more likely to switch to higher-quality, more expensive goods, and less likely to consume lower-quality, cheaper goods, which are considered inferior. Examples of inferior goods include generic brand food products, used cars, and discount clothing. Therefore, option D is the correct answer.

An Inferior Good Is One in Which