ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A product whose demand falls when income rises, and vice versa, is called an inferior good. In other words, when income increases, the demand curve for an inferior good shifts to the left.

Detailed explanation-2: -In economics, the demand for inferior goods decreases as income increases or the economy improves. When this happens, consumers will be more willing to spend on more costly substitutes. Some of the reasons behind this shift may include quality or a change to a consumer’s socio-economic status.

Detailed explanation-3: -In economics, an inferior good is a good whose demand decreases when consumer income rises (or demand increases when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those goods for which the demand rises as consumer income rises.

Detailed explanation-4: -Shifts in the Curve If the good is a normal good, higher income levels lead to an outward shift of the demand curve while lower income levels lead to an inward shift. When income is increased, the demand for normal goods or services will increase.

Detailed explanation-5: -To sum up, if the income level of a population increases, the demand curve will shift to the right, since there is more quantity of demand at every price point. The opposite will happen if the income level drops. Now there will be less money to spend, and the demand curve will shift to the left.