MYTUTOR SUBJECT ANSWERS

218 views

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.

Bertie M. A Level Economics tutor, GCSE Economics tutor, A Level Hist...

6 months ago

Answered by Bertie, an A Level Economics tutor with MyTutor


Still stuck? Get one-to-one help from a personally interviewed subject specialist

46 SUBJECT SPECIALISTS

£30 /hr

Adam B.

Degree: Economics and Mathematics (Bachelors) - Bristol University

Subjects offered: Economics, Maths+ 1 more

Economics
Maths
Further Mathematics

“Hi!  I'm an enthuthiastic and motivated tutor with a commitment to developing my student's understanding of concepts within their chosen subjects.  As an Economics and Mathematics undergraduate I am committed to delivering a tailored...”

£20 /hr

Anahita G.

Degree: Maths and Economics (Bachelors) - York University

Subjects offered: Economics, Science+ 3 more

Economics
Science
Maths
Chemistry
.TSA. Oxford.

“I am a maths and economics student at the University of York. I have always loved logical and analytical subjects, for example Maths and the Sciences. I also particularly enjoy economics as there are countless ways to analyse and conc...”

£24 /hr

Joe B.

Degree: Mathematics G100 (Bachelors) - Bath University

Subjects offered: Economics, Maths+ 4 more

Economics
Maths
Further Mathematics
.STEP.
.MAT.
-Personal Statements-

“About Me Hi, I'm Joe, a first year mathematics student from Luton studying at Bath University. I am an accomplished mathematician and economist, having achieved A* grades in A Level Maths, Further Maths and Economics in June 2016. As ...”

About the author

Bertie M.

Currently unavailable: for regular students

Degree: Combined Honours in Economics and History (Bachelors) - Durham University

Subjects offered: Economics, Maths+ 1 more

Economics
Maths
History

“About Me Hi, I'm Bertie, I am from Bolton and currently a student of Economics and History at Durham University. I am equally passionate about both subjects and I see tutoring as more than just drilling students for facts which can th...”

MyTutor guarantee

You may also like...

Other A Level Economics questions

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?

Why are no supernormal profits made in perfect competition in the long run?

What is inflation and how is it measured? (Including evaluation)

What effect would a fall in the interest rate have on GDP?

View A Level Economics tutors

Cookies:

We use cookies to improve our service. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok