Difference between revisions of "Inferior good"
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An inferior good is something that people [[demand]] less of when their [[income]] increases. An example of an inferior [[good]] would be White Castle for their cheap hamburgers. As one's [[income]] increases, he can afford McDonalds! | An inferior good is something that people [[demand]] less of when their [[income]] increases. An example of an inferior [[good]] would be White Castle for their cheap hamburgers. As one's [[income]] increases, he can afford McDonalds! | ||
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| + | Inferior goods are therefore said to have a negative income elasticity of demand. | ||
[[category:economics]] | [[category:economics]] | ||
Revision as of 13:12, December 15, 2008
An inferior good is something that people demand less of when their income increases. An example of an inferior good would be White Castle for their cheap hamburgers. As one's income increases, he can afford McDonalds!
Inferior goods are therefore said to have a negative income elasticity of demand.