If cheese in a can is an inferior good, what happens to its market when consumer income increases?

• A. Demand shifts to the left
• B. Demand shifts to the right
• C. Supply shifts to the left
• D. Supply shifts to the right

Answer: (A)

Verified step by step guidance

1. Begin by understanding the concept of an 'inferior good'. An inferior good is a type of good for which demand decreases as consumer income rises, and conversely, demand increases as consumer income falls.
2. Identify the relationship between consumer income and the demand for inferior goods. When consumer income increases, people tend to buy less of the inferior good because they can now afford more expensive substitutes.
3. Apply this concept to the market for cheese in a can. Since it is classified as an inferior good, an increase in consumer income will lead to a decrease in demand for cheese in a can.
4. Visualize this change on a demand curve. A decrease in demand is represented by a leftward shift of the demand curve on a graph where the x-axis represents quantity and the y-axis represents price.
5. Conclude that when consumer income increases, the demand for cheese in a can shifts to the left, indicating a decrease in demand at each price level.