What happens to the demand for inferior goods when consumer income rises?

When consumer income rises, the demand for inferior goods typically decreases. Inferior goods are those goods whose demand declines as consumer incomes increase. This phenomenon occurs because as people earn more money, they tend to opt for higher-quality or more expensive substitutes, leading to a drop in demand for the inferior goods they previously relied on.

For example, consider a product like instant ramen noodles, which might see decreased demand when consumers can afford to buy more expensive meals. This relationship highlights the inverse relationship between income levels and the demand for inferior goods, making the correct response clear. Understanding this concept is crucial for analyzing consumer behavior and market dynamics within macroeconomics.