Normal Good vs. Inferior Good

 … a core concept in Economic Analysis

Click for MRU video

Click for MRU video

Concept description

The effect of changes in income on demand depends on the nature of the good in question: for a normal good demand increases when income decreases and for an inferior good demand decreases when income increases.

This is illustrated in the image to the right where demand for an inferior good, hamburger helper, shifts from the blue line to the red line in a recession when average incomes decrease. (See Tyler Cowen, reference below and video to right.)


Tyler Cowen, The Demand Curve Shifts, Marginal Revolution University, at, accessed 20 April 2016.

Atlas topic and subject

Supply, Demand, and Equilibrium (core topic) in Economic Analysis.

Page created by: Ian Clark, last modified on 20 April 2016.

Image: Minute 6.47 of MRU Video, at, accessed 20 April 2016.