Question

If generic medicine is an inferior good, then an increase in

a.a consumer's income will cause the demand curve for generic medicine to shift to the left.
b.a consumer's income will cause the demand curve for the brand name equivalent to shift to the left.
c.the price of the brand name equivalent will cause the demand curve for generic medicine to shift to the left.
d.the price will cause the demand curve for generic medicine to shift to the left.

Answer 1

An increase in a consumer's income will cause the demand curve for generic medicine to shift to the left because it is an inferior good.

Step-by-step explanation:

An increase in a consumer's income will cause the demand curve for generic medicine to shift to the left. This is because generic medicine is an inferior good, which means that as income increases, the demand for generic medicine decreases. The income elasticity of demand for generic medicine is negative. When income rises, people are more likely to buy brand name equivalents instead of generic medicine.