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Consumer Choice and Utility
Theory of Consumer Choice
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Impact of Income on Consumer Choices

Income Levels and Inferior Goods

Income Levels and Inferior Goods

This graph demonstrates the inverse relationship between income and the consumption of inferior goods. As income rises, the quantity consumed of 'X1' decreases. This illustrates increased variance in consumer choice as income rises.

Source

    Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:

    Wikimedia.
    http://upload.wikimedia.org/wikipedia/commons/4/47/Income_consumption_curve_graph_-_downward_sloping_(inferior_goods).svg CC BY-SA.

Related Terms

  • Inferior goods
  • Income Effect
  • Wealth Effect
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