Inferior Goods and Economics

Question

What would happen to the new resulting equilibrium price and quantity of Ramen noodles (an inferior good), if incomes for US workers fell by 8% over the next two years?

Answer 1

Income is a determinate of demand. If incomes increase less ramen noodles (inferior good) would be purchased. The demand falls (Shifts left) therefore price and quantity also decrease.

If income had fallen more Ramen Noodles would be consumed. This makes sense as when people's incomes decrease they tend to substitute cheaper goods.

Incomes increase - (Less inferior goods) & (More normal goods)

Incomes Decrease - (More inferior goods) & (Less normal goods)