Consider the market for Mr. Beast Burger. If a recession were to occur in San Bernardino causing consumer incomes to fall, how would a decrease in consumer incomes impact the demand for Mr. Beast Burger?

A. This would decrease the demand for Mr. Beast Burger.
B. This would increase the demand for Mr. Beast Burger.
C. It depends on whether Mr. Beast Burger is considered a normal good or an inferior good.



Answer :

Final answer:

The impact of a recession on the demand for Mr. Beast Burger depends on whether it is considered a normal or an inferior good.


Explanation:

The decrease in consumer incomes due to a recession would likely impact the demand for Mr. Beast Burger in this scenario. Since people's incomes are falling, their purchasing power decreases. If Mr. Beast Burger is considered a normal good, its demand would decrease. However, if it is categorized as an inferior good, its demand might actually increase.

Normal goods experience a positive relationship between income and demand, meaning as income falls, demand falls. On the other hand, inferior goods show a negative income-demand relationship where demand increases as income decreases.

Therefore, whether the demand for Mr. Beast Burger decreases, increases, or remains unaffected depends on whether it's classified as a normal or an inferior good.


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