MYTUTOR SUBJECT ANSWERS

270 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...

7 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

62 SUBJECT SPECIALISTS

£26 /hr

Luke C.

Degree: PPE (Bachelors) - Oxford Alumni University

Subjects offered: Economics, Politics+ 6 more

Economics
Politics
Philosophy and Ethics
Maths
Government and Politics
.TSA. Oxford.
-Personal Statements-
-Oxbridge Preparation-

“I am a Master’s student in Political Science at the University of Chicago, and I’m currently writing a thesis on international security. Last year I graduated from the University of Oxford with a high 2:1 in PPE. In September, I’ll be ...”

£20 /hr

Yasmin A.

Degree: Business Economics (Bachelors) - Exeter University

Subjects offered: Economics, Business Studies

Economics
Business Studies

“Top tutor from the renowned Russell university group, ready to help you improve your grades.”

£20 /hr

Bhavin S.

Degree: Economics (Bachelors) - LSE University

Subjects offered: Economics, Maths+ 2 more

Economics
Maths
English
-Personal Statements-

“ABOUT ME Hello, I’m Bhavin and I am studying Economics at London School of Economics. For the past 4 years I have been tutoring Mathematics, English and Economics to students from primary school to A-level and have enjoyed being able ...”

MyTutor guarantee

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 happens to the Production Possibility Frontier (PPF) when productivity only increases in one good?

Explain what you understand by the Lorenz Curve and Gini Coefficient.

What characteristics might a perfectly competitive market have? Choose 3 (6 marks)

What is a budget deficit?

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