Results for normal good
On this page:
 
Business Dictionary:

Normal Good

A good for which demand increases when income increases, all other things being equal.

 
 
Wikipedia: normal good

In economics, normal goods are any goods for which demand increases when income increases, i.e. with a positive income elasticity of demand. 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.

example of a normal good and an inferior good

See also


Types of goods

public good - private good - common good - common-pool resource - club good - anti-rival goods

(non-)durable good - intermediate good (producer good) - final good - consumer good - capital good
inferior good - normal good - ordinary good - Giffen good - luxury good - Veblen good - superior good
search good - (post-)experience good - merit good - credence good - demerit good


 
 

Join the WikiAnswers Q&A community. Post a question or answer questions about "normal good" at WikiAnswers.

 

Copyrights:

Business Dictionary. Dictionary of Business Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Normal good" Read more

Search for answers directly from your browser with the FREE Answers.com Toolbar!  
Click here to download now. 

Get Answers your way! Check out all our free tools and products.

On this page:   E-mail   print Print  Link  

 

Keep Reading

Mentioned In: