Over the past decade consumer incomes have risen by 20 %. During that : transport has decreased by 10 %. Which of the following must be true? same time consumption of public The demand curve for public transport is upwards sloping. O The price of public transport must have increased by more than 20 %. O Public transport is an inferior good.

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Business

Rory Archer

25 November, 01:48

Over the past decade consumer incomes have risen by 20 %. During that : transport has decreased by 10 %. Which of the following must be true? same time consumption of public The demand curve for public transport is upwards sloping. O The price of public transport must have increased by more than 20 %. O Public transport is an inferior good.

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Answers (2)

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Marquise Mendoza · Answer 1

Public transport is an inferior good.

Explanation:

An inferior good is one whose demand drops when there is an increase in income. Consumers purchase the product because they do not have enough money to get what they will prefer. When they get enough income they will switch to their preferred product.

An increase in income by 20% resulted in a decrease in transportation by 10%. This shows that transportation is an inferior product and people for example preferred to buy cars. So now that they have money they will buy cars and stop using transportation.

Ivan Richard · Answer 2

The Correct answer is "Public transport is an inferior good".

However, it is identified that the Public transport is an inferior good it highlighted the facts that if there should arise an occurrence of substandard great, As, the increment in income of an individual prompts to decline in the amount of demand and vice versa.