How would a change in income affect the quantity demanded of an inferior good?

Goods can be classfied as either normal or inferior when we examine how a change in income of a consumer affects how much of agiven good they choose to consume.

In most circumstances one would expect that if income increased then because the consumer has more money in their pocket to spend they would increase consumption of the good in order to maximise their utility. This is what would happen if the good in question were a 'normal good'.

However, if the good is 'inferior' then an increase in income of the consumer would cause him or her to consume LESS of the good. The relationship between income and quantity demanded is negative. This is because certain goods are not valued as much by the consumer when their income rises. One such example is 'value' supermarket products. When income increases a consumer may wish to spend their money on higher quality produce because they can now afford it and in turn consume less of value produce. 

If income rises, the quantity demanded of an inferior good falls. If income falls, the quantity demanded of an inferior good increases.

Answered by Bertie M. Economics tutor

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