Inferior Goods

In economics, an inferior good is a type of good whose demand decreases as the income level of households increases. In other words, when the income level of a household rises, they tend to shift from inferior goods to higher-quality substitutes, which are often referred to as normal goods.

Examples of inferior goods include cheap, low-quality food products, public transportation, and low-end clothing. As people's incomes rise, they tend to prefer higher-quality food products, personal vehicles, and more expensive clothing. Therefore, the demand for these inferior goods decreases as people's incomes increase.

Reasons for the Demand Fall

There are several reasons why demand for inferior goods tends to fall as income levels rise:
- Higher income levels allow households to afford higher-quality substitutes, which offer better quality and features.
- As income levels rise, people tend to have more time to shop around for better deals and quality products, which reduces their reliance on inferior goods.
- Higher income levels also tend to increase people's social status and self-esteem, which may make them less willing to consume low-quality products.

Conclusion

In summary, the demand for inferior goods falls as the income levels of households increase. This is because people tend to prefer higher-quality substitutes as they can afford them. Therefore, the demand for inferior goods is inversely related to the income levels of households.

Correct Answer is inferior good because Inferior goods are very low price of goods so when the income of the consumer increase they do not want to purchase low quality of goods..