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In economics, normal goods are any goods for which demand increases when income increases, and falls when income decreases but price remains constant, i.e. with a positive income elasticity of demand.[1][2] The term does not necessarily refer to the quality of the good, but an abnormal good would clearly not be in demand, except for possibly lower socioeconomic groups.

In particular, when the price of a normal good is zero, the demand is infinite.

Depending on the indifference curves, the amount of a good bought can either increase, decrease, or stay the same when income increases. In the diagram below, good Y is a normal good since the amount purchased increases from Y1 to Y2 as the budget constraint shifts from BC1 to the higher income BC2. Good X is an inferior good since the amount bought decreases from X1 to X2 as income increases.

Examples include Holidays, Cars, diamonds, branded fashions, hi-tech products etc.

example of a normal good and an inferior good

See also[edit]

References[edit]


Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Normal_good — Please support Wikipedia.
This page uses Creative Commons Licensed content from Wikipedia. A portion of the proceeds from advertising on Digplanet goes to supporting Wikipedia.
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Normal and Inferior Goods

How the demand for some goods could actually go down if incomes go up More free lessons at: http://www.khanacademy.org/video?v=wYuAwm-5-Bk.

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133 news items

 
Alaska Dispatch
Thu, 30 Oct 2014 21:52:30 -0700

"It was a normal, good night for (Zanders)," Green said. It was a good night for McGlathery too. She had a hand in five of UAA's eight blocks, including one solo effort. Mackey, who is nursing a knee injury, finished with eight kills in two sets -- she ...
 
TheStreet.com
Fri, 31 Oct 2014 07:26:15 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
 
Alaska Dispatch
Thu, 30 Oct 2014 21:52:30 -0700

"It was a normal, good night for (Zanders)," Green said. It was a good night for McGlathery too. She had a hand in five of UAA's eight blocks, including one solo effort. Mackey, who is nursing a knee injury, finished with eight kills in two sets -- she ...
 
TheStreet.com
Fri, 31 Oct 2014 08:22:30 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
 
TheStreet.com
Thu, 30 Oct 2014 07:03:45 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
 
TheStreet.com
Thu, 30 Oct 2014 07:26:15 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
 
TheStreet.com
Thu, 30 Oct 2014 07:37:30 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
 
TheStreet.com
Wed, 29 Oct 2014 08:00:00 -0700

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press ...
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