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Question
Statistics
Posted 5 months ago
Economists have observed that when average incomes increase, purchases of fast food tends to decline.
Based on this information, what can we definitely say about fast food?
Choose 1 answer:
(A) Demand for fast food is upward sloping
(B) Fast food has no substitutes
(C) The price of a complement to fast food has risen
(D) Fast food is an inferior good
(E) Fast food is a normal good
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Answer from Sia
Posted 5 months ago
Solution by Steps
step 1
To determine the nature of fast food based on the given information, we need to understand the relationship between income and demand
step 2
The observation that purchases of fast food decline when average incomes increase suggests that fast food is a type of good whose demand decreases as income increases
step 3
In economics, goods that see a decrease in demand as income increases are known as inferior goods
step 4
Therefore, based on the given information, we can conclude that fast food is an inferior good
Answer
D
Key Concept
Inferior Good
Explanation
An inferior good is a type of good for which demand decreases as the income of the consumer increases.
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