If incomes are rising in an economy, why would we see a decrease in demand for...
If incomes are rising in an economy, why would we see a decrease in demand for certain goods?
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Homework Answers
If we consider normal goods such as expensive car, furniture, household appliances or products based on technology income and demand are directly related that is when there is a rise in income the demand also increases whereas in case of inferior goods such as cheap car, bread, rice income and demand are inversely related that is when there is a rise in income the demand decreases.Inferior goods are cheap goods.
When the income of individual is less he will obviously buy cheap goods or inferior goods because his income is constricted. But when the individual's income rises there will be a decrease in cheap goods or inferior goods because he can afford to buy normal goods like expensive car, furniture, etc
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If incomes are rising in an economy, why would we see a decrease
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