- Normal good
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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.
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 etc.
See also
References
Types of goods public good - private good (includes household goods) - common good - common-pool resource - club good - anti-rival good
(non-)rivalrous good and (non-)excludable good
complementary good vs. substitute good vs. independent good
free good vs. positional good(non-)durable good - intermediate good (producer good) - final good - capital good
inferior good - normal good - neutral good - ordinary good - Giffen good - luxury good - Veblen good - superior good
search good - (post-)experience good - credence good
damaged good - composite good - intangible goodCategories:- Economics and finance stubs
- Goods
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