Which of the following is true for inferior goods?
A)The law of demand does not hold
B)They are of low quality
C)The demand for them falls as consumer income rises
D)All of the above
E)None of the above

Question

Quizplus · Accepted Answer

Inferior goods are those for which demand falls as consumer income rises. This is because as people's incomes grow, they tend to purchase higher-quality substitutes for inferior goods. The law of demand still applies to inferior goods; as the price goes up, the quantity demanded decreases, and vice versa. It is not true that inferior goods are always of low quality, as this can vary based on consumer preferences and market conditions.

Which of the Following Is True for Inferior Goods