Question

Distinguish between inferior goods and normal goods.Is a good which is inferior for one consumer also inferior for all consumers.Explain

Answer 1

Answer:

When with the rise in income of the consumer demand for a good increases, that good is a normal good for that consumer. If with rise in income demand for the good decreases than that good is inferior for that consumer. A good is not necessarily inferior for all the consumers. A good which is inferior for a higher income consumer may be a normal good for the lower income consumer. It is not the consumer but ‌the income level of the consumer which determines whether a good is normal or inferior.