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

3627 Views

See similar Business Studies A Level tutors

Related Business Studies A Level answers

All answers ▸

Can you explain the Boston matrix to me?


What are the conditions that prompt trade?


Explain the importance of Outsourcing to an an international firm.


Analyse the benefits for a national firm of a government adopting protectionist trade policies?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences