Inferior goods are characterized by which of the following?

Inferior goods are defined by their unique behavior in relation to consumer income. When consumers experience an increase in their income, the demand for inferior goods decreases. This happens because, as people have more disposable income, they tend to shift their consumption patterns toward higher-quality goods or substitutes that are perceived as superior.

For example, if a household's income rises, they might choose to buy less generic brand food (an inferior good) and switch to name-brand products, which are often seen as higher quality. This characteristic directly distinguishes inferior goods from normal goods, for which demand increases when consumer income rises.

Therefore, the essence of inferior goods lies in this inverse relationship with income, leading to decreased demand as consumer incomes rise.