No, law of demand is not applicable on inferior goods because the income effect of inferior good is negative.

Introduction:
The law of demand states that there is an inverse relationship between the price of a product and the quantity demanded, assuming other factors remain constant. As the price of a good increases, consumers tend to demand less of it, and vice versa. However, when it comes to inferior goods, the law of demand may not always hold true.

Explanation:
Inferior Goods:
Inferior goods are those goods for which demand decreases as consumer income increases. These goods are typically of lower quality or less desirable compared to other alternatives. Examples of inferior goods include generic brands, used cars, and public transportation.

Exceptions to the Law of Demand:
While the law of demand generally applies to most goods and services, there are a few exceptions, and inferior goods are one of them. Here's why the law of demand may not hold true for inferior goods:

1. Income Effect:
When consumers' income increases, they tend to purchase higher-quality goods, leading to a decrease in the demand for inferior goods. However, if their income decreases, they may switch to purchasing inferior goods due to affordability constraints, leading to an increase in demand.

2. Substitution Effect:
The substitution effect suggests that as the price of a good increases, consumers may switch to cheaper alternatives. In the case of inferior goods, as their prices decrease, consumers may choose to switch to higher-quality goods, resulting in a decrease in demand.

3. Veblen Effect:
The Veblen effect occurs when consumers perceive a product as a status symbol or luxury item. In such cases, as the price of the inferior good increases, the demand may actually increase. This is because consumers associate higher prices with higher prestige or exclusivity.

Conclusion:
While the law of demand generally applies to most goods, it may not hold true for inferior goods due to factors such as income effect, substitution effect, and the Veblen effect. These exceptions demonstrate that the relationship between price and demand for inferior goods can be more complex and influenced by various factors beyond just price.