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Question
When the income of the consumer falls the impact on a price-demand curve of an inferior good is: (choose the correct alternative)
a. Shifts to the right.
b. Shifts of the left.
c. There is upward movement along the curve.
d. There is downward movement along the curve
Solution
Shifts to the right.
Demand for inferior goods has an opposite relationship with consumer's income. If there is a decline in the income of the consumer, the demand for an inferior good rise. Therefore, the consumer demand curve shifts towards the right.
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