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 inferior good is something that people [[demand]] less of when their [[income]] increases. An example of an inferior [[good]] would be the purchase of generic (or store brand) products. As [[income]] increases, name-brand products (which are typically more expensive) can be purchased. |
Inferior goods are therefore said to have a negative income elasticity of demand. | Inferior goods are therefore said to have a negative income elasticity of demand. | ||
[[category:economics]] | [[category:economics]] | ||
Revision as of 01:31, November 24, 2011
An inferior good is something that people demand less of when their income increases. An example of an inferior good would be the purchase of generic (or store brand) products. As income increases, name-brand products (which are typically more expensive) can be purchased.
Inferior goods are therefore said to have a negative income elasticity of demand.