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Question
What kind of a commodity will have inverse relation between income and demand?
Options
Normal good
Inferior good
Essential good
Luxury good
Solution
Inferior good
Explanation:
An inferior good is a type of commodity for which demand decreases as the income of the consumer increases, and vice versa. This inverse relationship occurs because, as consumers' income rises, they tend to purchase more expensive substitutes and reduce their consumption of the inferior good. For example, if a person's income increases, they might buy less generic brand food (inferior good) and more brand-name products (normal goods).
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