question archive Which of the following CANNOT result in a decrease in the equilibrium quantity sold of an inferior good? a) An increase in the price of a substitute for the good

Which of the following CANNOT result in a decrease in the equilibrium quantity sold of an inferior good? a) An increase in the price of a substitute for the good

Subject:EconomicsPrice:2.86 Bought4

Which of the following CANNOT result in a decrease in the equilibrium quantity sold of an inferior good?

a) An increase in the price of a substitute for the good.

b) An increase in consumer incomes.

c) An increase in wages paid to workers who produce the good.

d) An increase in the price of a complement for the good.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

  • ?a) An increase in the price of a substitute for the good.

Step-by-step explanation

With an increase in income, the consumer will usually buy more of a good. But with an increase in income, a person will buy less of a good if it happens to be an inferior good for him, as he will use better or higher alternatives instead of the inferior good as his income increases. As a consequence, the income effect can be either positive or negative. In the case of regular products, the income effect is positive.