Managerial Economics Essay
Name of the candidate: ASIF EKBAL Enrolment no. : 08715903912
Course: MBA 1ST Yr.
Subject: MANAGERIAL ECONOMICS
Subject code: MS105
Topic of assignment: UNIT 1
Subject Teacher’s name: MS MAMTA RANI
Q.1) “Inferior goods are not those goods in case of which the law of demand fails, inferior goods are those goods in case of which income effect is negative or these are the goods the demand for which decreases when income increases
Yes, law of demand fails in case of GIFFIN GOODS. It is in the case of these goods that there is
(A) Inverse relationship …show more content…
“WHILE ALL GIFFEN GOODS ARE INFERIOR GOODS, ALL INFERIOR GOODS ARE NOT GIFFEN GOODS.” * The demand for an inferior goods decreases with the increase in income of the consumer. But for normal goods the demand increases with the increase in the price of the product/goods or with the increase in income.
Inferior goods are basically those goods whose income effect is negative and it is associated with the lower socio-economic groups. The classical example of inferior goods is Inter-city bus service.
This form of transportation is cheaper than the air or rail travel, but it is more time