Question : For an inferior good , demand falls when
Option 1: Price rises .
Option 2: Income rises.
Option 3: Price fall.
Option 4: Income fall.
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Correct Answer: Income rises.
Solution : The correct option is income rises.
When consumer incomes rise, the demand for inferior goods tends to decrease, and conversely, when incomes fall, the demand for these goods tends to increase. This phenomenon occurs because as consumers experience an increase in income, they often opt for higher-quality or more desirable alternatives, reducing their demand for inferior goods.
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