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If the demand for a product X increased after a decrease in household income, then X is _______ A) an inferior good
If the demand for a product X increased after a decrease in household income, then X is _______
A) an inferior good.
B) income-neutral good.
C) a normal good.
D) a demand good.
Expert Solution
Ans : A) Inferior good - it is a type of goods whose demand decreases with increase in income because people prefer going for more expensive product.
B) Income neutral goods are those whose demand is independent of income changes.
C) Normal goods are those goods whose demand increases with increase in income.
D) A Demand good is a type of good who is always in demand despite any changes in any factor.
So, right option will be option A, as decrease in income of household will compel them to purchase inferior goods.
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