Definition Inferior Goods. Description.
Inferior Goods are goods or services for which an increase
in income results in a fall in the amount bought e.g. bread, canned vegetables,
and bus transportation. These products will have a negative income elasticity
of demand. A positive increase in income leads to a negative change in demand.
An inferior good decreases in demand when the consumer's income
rises, unlike Normal Goods, for which the opposite is observed. Inferiority,
in this sense, is an observable fact rather than a statement about the quality
of the good.
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Inferior Goods Special Interest Group
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Compare also: Activity Based Costing
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