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Differentiate between normal goods and inferior goods. |
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Answer» Normal goods are those goods whose demand increases when the income of a consumer increases and demand decreases when the income decreases, while the price of the goods remains unchanged. Example- wheat, grains, sugar, branded clothes, etc. Inferior goods are those goods whose demand decreases when the income of a consumer increases. Examples: of inferior goods are consumption of breads or cereals and since the income of the consumer increases he moves towards consumption of more nutritious foods and hence demand for low-priced products like bread or cereal, decreases. |
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