An inferior commodity is one which is consumed in smaller quantities when the income of consumer

Solution (By Examveda Team)

An inferior commodity is one which is consumed in smaller quantities when the income of the consumer rises.

Inferior goods are products whose demand decreases as the consumer's income increases. This is because consumers tend to shift to more expensive substitutes when their purchasing power grows. For example, as people earn more, they might buy less instant noodles and more fresh produce or dining-out meals.

Option A: Becomes nil
This option is incorrect because it does not relate to the income change scenario described for inferior goods. If a consumer's income becomes nil, the consumption behavior would change drastically for all types of goods, not just inferior ones.

Option B: Remains the same
This option is incorrect because if the income remains the same, the quantity demanded for inferior goods would not change.

Option C: Falls
This option is incorrect because when the income of the consumer falls, the demand for inferior goods typically increases as consumers substitute these for more expensive alternatives.

Example of correct usage:
When a consumer's income rises, they may purchase less generic or store-brand products (inferior goods) and opt for more brand-name or luxury items instead.

Understanding the concept of inferior goods helps economists and businesses predict changes in market demand based on economic conditions and consumer income levels.