If a consumer's income increases and the quantity demanded of a good decreases, that good is classified as:
Correct answer: B. An inferior good
- A. A normal good
- B. An inferior good
- C. A luxury good
- D. A complementary good
Explanation
Demand for an inferior good falls when income rises, because consumers shift toward preferred alternatives. A normal good has the opposite income response, while luxury and complementary describe different relationships.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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