If Good Z Is 'Inferior', Then an Increase in Income

question 84

Multiple Choice

If good Z is 'inferior', then an increase in income will cause:

• A)demand for good Z will increase
• B)market price of good Z will increase
• C)demand for good Z will decrease
• D)demand for good Z will not change

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Definitions:

Purely Competitive Firm

A company that operates in a market where there are many sellers and buyers, the products are homogeneous, and there is free entry and exit from the market.

Vertical Axis

The y-axis in a graph, which typically shows the range of values for the variable measured.

Pure Competition

A market structure featuring a large number of small firms selling identical products, with no single firm able to influence market price.

Differentiated Products

Goods and services that are distinct from those offered by competitors due to unique characteristics, branding, quality, or features.