If Incomes increase what would happen to demand for bus rides (an inferior good) in the market?

Start the question by defining what is an inferior good - An inferior good is a type of good for which demand declines as the level of income or real GDP in the economy increases. 

Since we are looking at an inferior good (bus rides) the quantity demanded will decline.

Why? As incomes increase and people become richer they will use more luxurious methods of transport e.g trains or buy cars instead of the bus.  Therefore on the graph representing the market demand I will now show the demand for bus rides decreasing. To do this the demand line would shift to the left as this shows a decrease in demand.

SP
Answered by Sarah P. Business Studies tutor

4293 Views

See similar Business Studies A Level tutors

Related Business Studies A Level answers

All answers ▸

What are Porter's Five Forces and how are they used?


To what extent is competition the main threat to British Airways’ future profitability? (20)


What is the difference between qualitative and quantitative market research?


How should I structure my answer to 40 mark questions?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning