Explain the difference between an inferior and a normal good.

1.	Explain the difference between an inferior and a normal good.
Answer» Normal Goods :- Normal goods are those goods for which the demand rises with every increase in the income of the consumer. In other words, in case of normal goods, there is a direct relationship between income of a consumer and his demand for normal goods, e.g. , the demand for rice and wheat will increase with every increase in income. Thus, rice and wheat are normal goods. Inferior Goods :- Inferior goods are low quality products and their demand decreases when the income of the consumer increases and vice versa. In other words, in case of inferior goods, there is an inverse relationship between demand and income of the consumer, e.g. , the demand for peanuts or bajra will fall with the rise in the Income of the consumer. Hence, peanuts and bajra become inferior goods at a higher level of income.

Answer»

Normal Goods :- Normal goods are those goods for which the demand rises with every increase in the income of the consumer. In other words, in case of normal goods, there is a direct relationship between income of a consumer and his demand for normal goods, e.g. , the demand for rice and wheat will increase with every increase in income. Thus, rice and wheat are normal goods.

Inferior Goods :- Inferior goods are low quality products and their demand decreases when the income of the consumer increases and vice versa. In other words, in case of inferior goods, there is an inverse relationship between demand and income of the consumer, e.g. , the demand for peanuts or bajra will fall with the rise in the Income of the consumer. Hence, peanuts and bajra become inferior goods at a higher level of income.

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