Which of the following is true for inferior goods?

For inferior goods, demand behaves in a specific way related to changes in consumer income. When discussing inferior goods, it is important to understand that these are products for which demand increases when consumer income decreases and vice versa. This relationship occurs because consumers tend to opt for lower-quality, less expensive alternatives when their income drops, leading to increased demand for these inferior goods.

In contrast, luxury items and other high-quality products see demand increase when income rises, which is not the case for inferior goods. Therefore, the concept of inferior goods is directly tied to the inverse relationship with income changes. As a result, the statement that aligns with the characteristics of inferior goods confirms that demand decreases as income increases and increases when income falls, meaning option A is not accurate.

Understanding this definition indicates that inferior goods are not luxury items, nor do they have stable demand across different income levels. Instead, their demand is actively influenced by changes in consumer income. This differentiation is critical in economic theory and helps explain consumer behavior in response to income variations.