ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An inferior good is an economic term that describes a good whose demand drops when people’s incomes rise. These goods fall out of favor as incomes and the economy improve as consumers begin buying more costly substitutes instead.

Detailed explanation-2: -Inferior goods are goods for which demand declines as consumers’ real incomes rise, or rises as incomes fall. Consumers with more money may opt to buy more expensive substitutes instead of what they could afford only when incomes were lower.

Detailed explanation-3: -Inferior goods refer to those goods whose demand decreases with an increase in income. For example, if the demand for “jaggery” decreases with an increase in income, then “jaggery” is an inferior good.

Detailed explanation-4: -The goods that increase consumption as the price increases are known as the Giffen good. Thus, it violates the law of demand by showing an upwards-sloping curve of the demand. Moreover, all the Giffen goods are always inferior.

Detailed explanation-5: -Inferior goods are those goods, the demand for which falls as income of the consumer increases. Hence, there is a negative effect. Q. Income elasticity of demand for inferior goods is negative.