Explain the Difference Between an Inferior Good and a Normal Good. - Economics

Advertisements
Advertisements

Explain the difference between an inferior good and a normal good.

Advertisements

Solution

Inferior goods are goods which have a negative relationship between income and quantity demanded. Assuming that other things remain constant, an increase in the consumer’s income will lead to a decrease in the quantity demanded and a decrease in the consumer’s income will lead to an increase in the quantity demanded.

Normal goods are goods which have a positive relationship between income and demand. Assuming that other things remain constant, an increase in the consumer’s income will lead to an increase in the quantity demanded and a decrease in consumer’s income will lead to a decrease in the quantity demanded.

Concept: Change in Quantity Demand
  Is there an error in this question or solution?
2012-2013 (March) Delhi Set 1
Share
Notifications



      Forgot password?
Use app×