Normal Goods and Inferior Goods

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What else does the normality of a good depend on?

Tastes and preferences, and age.

Example of a normal good

A car, as income rises the demand for cars increase.

Inferior Good

A good for which demand decreases as income rises and demand increases as income falls.

Normal Good

A good for which demand increases as income rises and demand decreases as income falls.

Example of changes in normality due to age and preference

Junk food for young children is a normal good as an increase in pocket money will increase demand. As children get older, tastes change and sweets may become an inferior good.

Example of an inferior good

Public transport, as income rises the demand for public transport rather than private travel decreases.

Usually, an increase in disposable income means that the demand curve shifts rightwards, but what does this depend on?

Whether the good is a normal good or inferior good.


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