INFERIOR GOODS

Inferior Goods:

             when the income of the consumer increases/raises with the fall in the prices of the commodities then the consumer buys lesser inferior goods and moves towards superior goods, as now he can afford that.The price effect the income and substitute goods together.As substitution arises always whether it is inferior (or) superior.

   Demand of inferior goods is inversely related to the income of the consumer.

Ex:

  When your income is low then the consumer prefers bus or train to go to long destinations.But when the income increases he used to plan to go through flight as he can afford it.

   

  Consumer used to drink a coffee in Starbucks every time but when the income decreases then the consumer prefers to go the small coffee shops as now he cannot afford it.