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Question
Distinguish between Normal goods and Inferior goods.
Solution 1
Normal goods are those in case of which there is a positive relationship between income and quantity demanded.
Inferior goods are those in case of which there is a negative (or inverse) relationship between income and quantity demanded.
Solution 2
| Normal goods | Inferior goods | ||
| (i) | Normal goods are those whose quantity demanded increases with an increase in income. | (i) | Inferior goods are those whose quantity demanded decreases with an increase in income. |
| (ii) | e.g. telephones, clothes, household furniture are normal goods. | (ii) | e.g. Bidi is inferior to cigarette, Kerosene's stove is inferior to gas stove, etc. |
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RELATED QUESTIONS
The demand for ______ goods will increase with the increase in the consumers income.
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An increase in income leads to a rise in the demand for normal goods.
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The commodity for which quantity demanded decreases with an increase in income is called inferior commodity.
