An Item Whose Demand Rises as People's Incomes Fall Is

question 125

Multiple Choice

An item whose demand rises as people's incomes fall is known as a(n) _____ good.

• A) inferior
• B) complementary
• C) superior
• D) substitute

---

Definitions:

Perfect Competition

A market structure characterized by a large number of buyers and sellers, homogenous products, and the free entry and exit of firms, leading to price-taking behavior.

Market Price

The price at which a good or service is bought and sold in a marketplace, determined by the forces of supply and demand.

Perfect Competitors

Firms operating in a market where there are many sellers and buyers, products are homogenous, and there is free entry and exit from the market.

Short Run

A period in economics during which at least one input (like factory size) is fixed and cannot be changed, contrasting with the long run where all inputs can be varied.