Inferior Goods

Question 1

1

Answer 1

When unemployment is high then incomes will be lower and therefore the demand of inferior goods will increase

Question 2

2

Answer 2

The business may then need to be flexible to be able to respond to an unexpected change in income so they can increase production of a good to meet the new demand

Question 3

3

Answer 3

This is will lead to an increase in gross profit

Question 4

4

Answer 4

This flexibility will also helps them reduce production when incomes rise again

Question 5

5

Answer 5

This will help ensure that they can reduce operating expenses when demand falls therefore avoiding a loss