Inferior good
Definition. An inferior good is a good for which demand falls as consumer income rises, and rises as income falls, giving it a negative income elasticity of demand. As people become wealthier they switch away from such goods towards more preferred alternatives.
This contrasts with a normal good, whose demand rises with income, and is illustrated by lower quality substitutes that consumers buy less of when they can afford better options.
This term belongs to Income and Cross Elasticity of Demand in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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