Answer
a. prices and quantities both rise
Work Step by Step
During recession price of goods increase and people's purchasing power would decrease. Due to this, people would demand less of the normal goods and switch their preference to inferior substitutes. Hence, the demand for the inferior goods would increase and the demand curve would shift to the right. This rightward shift in the demand curve will increase the equilibrium price. Thus, both the quantity demanded and the price of inferior goods increase during a recession.
Since, even at the increased price, inferior goods would be cheaper than the normal goods. Hence, people would prefer inferior goods over normal goods.
