Explain the difference between an Inferior Goods and a Normal Goods. – InterviewSolution

1.

Explain the difference between an Inferior Goods and a Normal Goods.

Answer»

The following table shows the differences between them:

Point of differences	Normal Goods	Inferior Goods
Meaning	These are those goods whose demand increases with an increase in income.	These are those goods whose demand decreases with an increase in income.
Income effect	Income effect is Positive.	Income effect is negative
Relation	There is a direct relation between income and demand for normal goods.	There is an inverse relation between income and demand for inferior goods.
Example	Full Cream Milk	Toned Milk.

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