A good is said to be "inferior" if
A) it is of low quality.
B) consumers buy less of it at a high price.
C) it has a negative income elasticity of demand.
D) it has many substitutes.

Question

Quizplus · Accepted Answer

An inferior good is a good for which demand decreases as consumer income increases. In other words, its income elasticity of demand is negative. This means that as people's income increases, they switch to higher-quality substitutes, reducing their demand for the inferior good.

A Good Is Said to Be "Inferior" If