alleryStart learning →If overnight stays is an inferior good, the consumer instead makes a choice like:
APoint O
BPoint Q
CPoint P
DPoint N
Answer & Solution
Correct answer: C. Point P
1. Inferior goods move the chosen bundle differently.
2. On the new budget constraint, the choice is like N if both goods are normal.
3. If overnight stays is an inferior good, Kimberly will make a choice like P.
4. The good's type therefore decides which point is chosen.
_Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 6 'Consumer Choices'_
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