What is an inferior good

An inferior good is a good whose demand decreases when consumer income rises. This means that if a person suddenly has more money to spend (perhaps because they got a raise), they will start to buy less of these types of good.
A good example of inferior goods is items in the budget range at a supermarket. As incomes rise, people will buy less sainsbury's basics items and 'big-name' branded items.
An inferior good is the opposite to a normal good. A normal good is a good whose demand increases as consumer income increases. For example, organic pasta would be something that increases in demand as consumer income increases.

DH

Related Economics A Level answers

All answers ▸

Explain the impact of an increase in oil prices on UK economic growth and inflation.


What is diminishing marginal utility?


Explain the main sources of monopoly power.


Explain the likely effects on the circular flow of income of the change in unemployment between 2013 and 2015.