Question

Max's demand for hot dogs falls as his income rises, then for Max hot dogs are a. a bad good. b. a normal good. c. a neutral good. d. an inferior good. e. a preferential good.

Answer 1

         The reduction in Max's demand for hot dogs as his income rises shows that Max's hot dogs are an inferior good.

What is an inferior good?

An inferior good is a concept used in economics to describe a product whose demand falls as people's earnings increase. As salaries and the economy improve, people begin to replace these things with more expensive alternatives.

• The demand for an inferior good usually falls as consumer income grows, as opposed to normal goods, which experience the reverse. 

Therefore, we can conclude that the reduction in Max's demand for hot dogs as his income rises shows that Max's hot dogs are an inferior good.

Learn more about inferior goods here:
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