Normal and Inferior Goods and Its Examples

Normal goods can be defined as those goods for which demand increases when the income of the consumer increases and falls when income of the consumer decreases, price of the goods remaining constant. Examples of normal goods are demand of LCD and plasma television, demand for more expensive cars, branded clothes, expensive houses, diamonds etc… increases when the income of the consumers increases.

To the opposite side of normal goods are the inferior goods. It is defined as those goods the demand for which decreases when the income of the consumer increases. Examples of inferior goods are consumption of breads or cereals and since the income of the consumer increases he moved towards consumption of more nutritious foods and hence demand for low priced product like bread or cereal decreases. Another example can be of use of public transportation, when income is low people use more of public transportation which is not the case when their income increases.

Hence from the above one can see that other things remaining constant as the income of consumer increases demand for normal goods will increase and demand for inferior goods decrease and vice versa.

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2 comments

  1. so in this case , normal good means when the income of the consumer increases the like to buy LCD and plasma television, demand for more expensive cars, branded clothes, expensive houses, diamonds etc…

    inferior good means when the income decreases people switch to public transport , taxi, by cycle…etc.

    i am right .

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