Increase in the income of the buyers -in of an inferior good- will cause-fall in equilibrium price and quantity-rise in equilibrium price and quantity-fall in equilibrium price and increase in equilibrium quantityincrease in equilibrium price and fall in equilibrium quantity

Question

Toppr Admin · Accepted Answer

In case of inferior goods- the income affect is negative I-e- income and demand is inversely related- When the price of the goods decreases the consumer will purchase less of that commodity and use the extra purchasing power to purchase superior quality of goods- Hence- with the rise in real income-purchasing power the equilibrium quantity as well as the price will reduce-xA0-

Increase in the income of the buyers (in case of an inferior good) will cause________________.fall in equilibrium price and quantity.rise in equilibrium price and quantity.fall in equilibrium price and increase in equilibrium quantityincrease in equilibrium price and fall in equilibrium quantity