GK
INDIAN ECONOMY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
If the price of an inferior good falls, its demand
|
|
rises
|
|
|
falls
|
|
|
remains constant
|
|
|
can be any of these
|
Explanation:
Detailed explanation-1: -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.
Detailed explanation-2: -If the price of a good falls, the quantity demanded of that good increases. The relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same. Demand is a list of quantities at different prices and is illustrated by the demand curve.
Detailed explanation-3: -In case of normal goods, income effect is positive, while in case of inferior goods, it is negative.
There is 1 question to complete.