In the Case of an Inferior Good, _______ Falls When

question 207

Multiple Choice

In the case of an inferior good, _______ falls when income _______ .

• A) supply; rises
• B) demand; rises
• C) demand; falls
• D) supply; falls

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Definitions:

Equilibrium

A state in which market supply and demand are balanced, and as a result, prices become stable.

Market

A place or system where buyers and sellers interact to trade goods, services, or resources.

Price

The money total set, required, or given as remuneration for something.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay.