Figure 3-7

-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good.Which panel describes what happens in this market as a result of a decrease in income?
A)Panel (a)
B)Panel (b)
C)Panel (c)
D)Panel (d)

Question

Figure 3-7
 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good.Which panel describes what happens in this market as a result of a decrease in income?
A)Panel (a) 
B)Panel (b) 
C)Panel (c) 
D)Panel (d)

Quizplus · Accepted Answer

A decrease in income increases the demand for an inferior good like used clothing, shifting the demand curve to the right, as shown in Panel (c).

Figure 3-7 -Refer to Figure 3-7.Assume That the Graphs in This Figure