1.

Give the meaning of inferior good and explain the same with the help of an example.

Answer»

SOLUTION :(i) A good is called .inferior GOODS. when its demand falls with a rise in the income of a consumer and VICE- versa.
(ii)For example, JOWAR or Bajra for a poor person.
(iii) A good is inferior in a relative terms. It means, a good is inferior or normal is determined by the income level of a consumer.
(iv)When a consumer moves to HIGHER income, he/she may consider some goods below their income status, and treats them as inferior.


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