Finally, if one of the goods is inferior its consumption must increase as income falls. On the graph to the right we show the case where TD is inferior. (For the sake of this illustration we're not worrying about the reality that it must be normal at very low income levels.)

    Suppose our consumer is purchasing bundle A when she is on the blue budget. As her income falls her consumption of TD will increase so that her new consumption bundles must lie in the green shaded region. On the brown budget she would choose a bundle somewhere in the red shaded region.

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