public transportation is an inferior good. if consumers' incomes decrease this will cause -demand for public...

public transportation is an inferior good. if consumers' incomes decrease this will cause

-demand for public transportation to increase

-demand for public transportation to decrease

Expert Solution

Answer;

Option A is the correct answer.

Inferior goods are those goods when the income of the consumers increases the demand for inferior good decreases and income decreases, the demand for inferior good increases.

Public transportation is an inferior good, if consumers' incomes decrease this will cause demand for public transportation to increase. This can be shown in the following figure;

In the above figure, x-axis shows quantity and y-aaxis shows price. D is the demand curve and S is the supply curve. As the result of decrease in income, the demand for public transportation increases, the demand curve shift to the right.

Rahul Sunny answered 2 years ago

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