consider the market for widgets (an inferior good). suppose that we see an incre

Question

consider the market for widgets (an inferior good). suppose that we see an increase in household incomes and at the same time higher labor costs for widget producers what is likely to happen to the equilibrium price and equilibrium quantity in this market? consider the market for widgets (an inferior good). suppose that we see an increase in household incomes and at the same time higher labor costs for widget producers what is likely to happen to the equilibrium price and equilibrium quantity in this market? consider the market for widgets (an inferior good). suppose that we see an increase in household incomes and at the same time higher labor costs for widget producers what is likely to happen to the equilibrium price and equilibrium quantity in this market?

Explanation / Answer

An inferior good is those goods which demand falls when income of household increases. Due to low demand the equilibrium quantity and price also decreases in the market.

For example Tesco value bread- when income rises the demand of this bread decline because people buy more quality breads. Therefore quantity and price also falls.

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