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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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1233 news items

ecns

ecns
Mon, 23 Mar 2015 17:45:00 -0700

'New normal' good for business, says Premier. 2015-03-24 09:18 China Daily Web Editor: Si Huan. 1. Premier Li Keqiang meets Christine Lagarde, president of the International Monetary Fund, at the Great Hall of the People in Beijing, March 23, 2015.

Port Technology International

Port Technology International
Mon, 09 Mar 2015 05:33:45 -0700

Drewry Maritime Research has stated that it would be undesirable for US West Coast ports simply to return to normality after the recent congestion-causing labour disputes were rectified, pointing-out that US East Coast ports have long been hitting ...
 
Winfield Daily Courier Online
Wed, 01 Apr 2015 21:18:45 -0700

Normal good business sense requires that prudent decisions should be based on thorough review of requirements and a willingness to work together for the best decision. What do you want to see in a new president? Do you have a specific candidate you ...

Al-Arabiya

Al-Arabiya
Mon, 30 Mar 2015 20:38:25 -0700

Sweden's prime minister signaled improved ties with Saudi Arabia on Monday, saying the European country's ambassador would be back in the Arab kingdom “soon.” “We are getting back to a normal good relation, that was our intention all the time, so we ...

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Wed, 01 Apr 2015 22:37:30 -0700

A production assistant noticed it when Morgan was assisting on a set, and asked to have a look. Eight months later, while Morgan was back working at a video store, he got a call from the people working on “Gladiator” at DreamWorks. They liked his ...
 
TheStreet.com
Fri, 27 Mar 2015 08:33:45 -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 ...

Hindustan Times

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Sat, 28 Mar 2015 23:45:00 -0700

I'm not referring to the typical readers of this column, but this happens at least with most normal, good people. That guilt suddenly makes you want to be all nice to the victim of your gossip. So without that person even knowing the reason for it, you ...

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Thu, 26 Mar 2015 12:18:51 -0700

He said it was a "normal, good, strong, steady year for the insurance practices." A Philadelphia Eagles fan at heart, Heller likened his firm's insurance practices to the New England Patriots. "Each year we are going to make the playoffs and some years ...
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