What is an inferior good?

The income elasticity of demand measures the relationship between a change in quantity demanded and a change in income. The formula is:

(Percentage change in quantity demanded of good x) divided by (the percentage change in real consumers' income)

Inferior goods have a negative income elasticity of demand. This means that demand falls as income rises. An example is frozen vegetables - as we become richer and earn more income, we consume less of this as we can afford to eat nicer foods.

MC
Answered by Michelle C. Economics tutor

12982 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What are the advantages and disadvantages of globalisation? (6)


Why are monopolies inefficient?


What are the 4 main factors of production?


Using Figure 5, assess whether the decision to install the machine (used in production in an independent fast food shop) will be beneficial for the business and the workers.


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:

© 2025 by IXL Learning