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Other things remaining constant, if the price of the inferior goods decreases then what will be the effect?
  • a)
    Demand increases
  • b)
    Demand decreases
  • c)
    Quantity demanded increases 
  • d)
    Quantity demand decrease. 
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Other things remaining constant, if the price of the inferior goods de...
Effect of Decrease in Price of Inferior Goods on Quantity Demanded

When the price of an inferior good decreases, it will lead to a decrease in the quantity demanded of that good. This is due to the fact that inferior goods are considered to be of lower quality compared to other goods in the market. As such, when the price of an inferior good decreases, consumers will tend to shift to other goods that are considered to be of better quality.

Factors Affecting Demand for Inferior Goods

There are several factors that affect the demand for inferior goods:

1. Income: Inferior goods are those goods for which the demand decreases as income increases. As such, a decrease in the price of an inferior good will lead to a decrease in the quantity demanded.

2. Availability of substitutes: If there are substitutes available for a particular inferior good, then consumers are likely to shift to those substitutes when the price of the inferior good decreases.

3. Perception of quality: The perception of quality of a good can also affect the demand for that good. If consumers perceive an inferior good to be of lower quality, then they are likely to shift to other goods when the price of the inferior good decreases.

Conclusion

In conclusion, when the price of an inferior good decreases, it will lead to a decrease in the quantity demanded of that good. This is due to the fact that consumers will tend to shift to other goods that are considered to be of better quality. Factors such as income, availability of substitutes, and perception of quality can also affect the demand for inferior goods.
Community Answer
Other things remaining constant, if the price of the inferior goods de...
Quantity demand decrease because inferior goods are low quality goods and law of demand does not apply on inferior goods.
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Other things remaining constant, if the price of the inferior goods decreases then what will be the effect?a)Demand increasesb)Demand decreasesc)Quantity demanded increasesd)Quantity demand decrease.Correct answer is option 'D'. Can you explain this answer?
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