If an increase in income leads to a decrease in the demand for a good, then the good is said to be:
A) normal.
B) a luxury.
C) inferior.
D) a staple or necessity.

Question

Quizplus · Accepted Answer

When an increase in income leads to a decrease in demand for a good, it is referred to as an inferior good. This is because as consumers' income increases, they tend to shift towards higher quality goods, which results in a decrease in demand for inferior goods. Examples of inferior goods include low-quality clothing, generic brands of food, and public transportation.

If an Increase in Income Leads to a Decrease in the Demand