In the figure to the right, the current position of the demand curve for a good is Upper D 1
,
and the price of the good, which is an inferior
good, is $4. If there is an increase in consumer incomes, which way will the demand curve shift? Will the quantity demanded of the good increase or decrease?
1 answer
If the good is inferior, an increase in consumer incomes will lead to a decrease in the demand for the good. Therefore, the demand curve will shift to the left. The quantity demanded of the good will decrease.
4 answers