asked 70.0k views
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Suppose that everyone's income increases and that Maruchan ramen noodles are an inferior good. As a result, on the market for Maruchan ramen noodles:

asked
User Farcrats
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7.6k points

1 Answer

2 votes

Final answer:

An increase in income will lead to a decrease in the demand for Maruchan ramen noodles if they are an inferior good.

Step-by-step explanation:

An inferior good is a good for which demand declines as income rises. In the case of Maruchan ramen noodles being an inferior good, this means that as everyone's income increases, the demand for Maruchan ramen noodles will decrease. This is because people will be able to afford more expensive food choices that they prefer.

For example, a higher-income household might eat fewer hamburgers or be less likely to buy a used car and instead eat more steak and buy a new car. The increase in income allows them to choose more expensive alternatives to Maruchan ramen noodles.

Therefore, if income increases and Maruchan ramen noodles are an inferior good, there will be a decrease in the demand for Maruchan ramen noodles on the market.

answered
User Maylin
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8.5k points
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