Normal good
Definition. A normal good is a good for which demand rises as consumer income rises and falls as income falls, other things being equal. It has a positive income elasticity of demand, so an increase in income shifts the demand curve to the right.
Normal goods are subdivided into necessities, with income elasticity between zero and one, and luxuries, with income elasticity greater than one. They contrast with inferior goods, which have negative income elasticity.
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.
Want to use normal good for marks in the exam? Learn it in class or message the team.