According to demand theory, the demand for an inferior good tends to change in what way when the income of the consumer changes?

Introduction / Context:
In microeconomics, goods are often classified as normal goods and inferior goods depending on how their demand responds to changes in consumer income. Understanding this distinction is important for analysing consumption patterns and the impact of economic growth or recession on different markets. This question asks you to recall how the demand for an inferior good behaves when the consumer's income changes.

Given Data / Assumptions:

• We are dealing with inferior goods in the economic sense, not in terms of quality judgement alone.
• Consumer income is changing, while prices are assumed constant.
• We want the direction of change in demand as income rises or falls.
• Other factors like tastes and preferences are assumed unchanged.

Concept / Approach:
An inferior good is defined as a good for which demand moves inversely with income, holding other factors constant. When consumer income rises, people tend to shift their consumption towards better quality substitutes and away from inferior goods, so demand for the inferior good falls. Conversely, when income falls, consumers cut back on more expensive goods and may buy more of the cheaper inferior good, so demand for the inferior good rises. This is opposite to the behaviour of normal goods, for which demand increases with income.

Step-by-Step Solution:
Step 1: Recall the formal definition of an inferior good: demand decreases when income increases, and demand increases when income decreases. Step 2: Focus on the wording in the question about demand changing with a change in consumer income. Step 3: Identify the option that correctly states that demand for the inferior good increases when the consumer income decreases. Step 4: Confirm that this inverse relationship matches the standard microeconomic definition.

Verification / Alternative check:
A simple example is low quality staple food or very cheap public transport in some contexts. When people become poorer, they may buy more of the cheapest staple or use more low cost transport because they can no longer afford better alternatives. When their income rises, they shift away to higher quality or more convenient options. This real world pattern of substitution fits the theoretical definition and confirms that demand for an inferior good increases when income declines.

Why Other Options Are Wrong:
It increases when the consumer income increases: This describes normal goods, not inferior goods.
It remains constant regardless of income changes: Very few goods have demand completely unaffected by income; this does not define inferior goods.
It doubles whenever income doubles: This suggests a proportional positive relationship between income and demand, which again describes some normal goods, not inferior goods.

Common Pitfalls:
Many learners confuse “inferior” in the everyday sense of low quality with the precise economic definition related to income elasticity of demand. A good may be low quality but not necessarily inferior in the economic sense if its demand still rises with income. The key for exams is to remember the inverse relationship between income and demand for inferior goods, which leads to the correct option in this question.

Final Answer:
For an inferior good, demand increases when the consumer income decreases and falls when income rises.