Which of the following statements is correct If income incre

Which of the following statements is correct?

If income increases, demand will shift left for an inferior good

If the price of an input decreases, supply will shift left

If the number of sellers in the market increases, supply will shift left

Actually, all of the above are correct

Solution

Ans is A

Inferior goods are those good whose demand has inverse relation between income.

I.e. As imcome increases, demand decreases but in the entire proportion prices are remain constant. Thus demand chnages due to change in other factor leading to decreases in demand an leftward shift of demand curve

If price of input decreases, supply curve shifts right

If supplier or seller increases then also supply shift right.