Normal Goods and Inferior Goods

Are goods that are usually demand dependent on income; inferior goods increase in demand when income is low and normal goods increase in demand when income is high.

Inferior goods are goods that we would expect to sell more of during a recession or economic downturn. This is because they are relatively cheap and during recession’s income is reduced and so people want to buy cheaper goods. Example of this include 2^nd hand items and supermarket own brands.

Normal Goods are the opposite and so a higher income results in a higher consumption/demand for a good. Most goods are normal and so would benefit when incomes are higher.

Page last updated on 20/10/13