Suppose that consumer income decreases and that hamburger is an inferior good. Which of the following will occur in the market for hamburger?
A)Market clearing price will rise, and equilibrium quantity will rise.
B)Market clearing price will fall, and equilibrium quantity will fall.
C)Market clearing price will rise, and equilibrium quantity will fall.
D)Market clearing price will fall, and equilibrium quantity will rise.

Question

Quizplus · Accepted Answer

When consumer income decreases, the demand for an inferior good like hamburger increases, leading to a higher market clearing price and a higher equilibrium quantity.

Suppose That Consumer Income Decreases and That Hamburger Is an Inferior