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Theory Of Consumer Behaviour
When income of the consumer falls, the impact on price-demand curve of an inferior
good is: (choose the correct alternative)
Shifts to the right.
Shifts of the left.
There is upward movement along the curve.
There is downward movement along the curve.
A.
Shifts to the right.
Reason: Demand for inferior goods share a negative relationship with consumer's income.
Hence, when the income of the consumer falls, the demand for inferior good
increases leading to the rightward shift of the demand curve.
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