ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inferior goods are goods for which demand actually declines as consumers’ real incomes rise, or rises as incomes fall. This occurs when a good has more costly substitutes that see an increase in demand as the economy improves.

Detailed explanation-2: -Conversely, the demand for inferior goods increases when incomes fall or the economy contracts. When this happens, inferior goods become a more affordable substitute for more expensive goods. The term “inferior good” refers to affordability, rather than quality, even though some inferior goods may be of lower quality.

Detailed explanation-3: -In the case of normal goods, income and demand are directly related, meaning that an increase in income will cause demand to rise and a decrease in income causes demand to fall.

Detailed explanation-4: -Inferior goods refer to those goods whose demand decreases with an increase in income.

Detailed explanation-5: -Inferior goods are the goods whose demand falls when consumer’s real income rises and whose demand rises when consumer’s real income falls. Hence, when the price of the inferior goods falls, the quantity demanded for them decreases. Was this answer helpful?