Question

For an inferior good, an increase in consumer income will cause

A. the demand curve to shift to the left
B. the demand curve to shift to the right
C. the short-run supply curve to shift to the right
D. the long-run supply curve to shift to the right
E. new firms to enter the market in the long run

Answer 1

Answer:

A. the demand curve to shift to the left

Explanation:

For an inferior good, an increase in consumer income will cause the demand curve to shift to the left

An inferior good is a type of good whose demand falls or decrease as a result of an increase in the income of consumers.

When consumers income increases, they tend to substitute inferior goods for a more expensive good.

An inferior good is more cheaper. Consumers substitute cheap goods for expensive ones when their income increases because they believe expensive goods has better quality than a cheap good.