Principles of Macroeconomics / Unit 2 MAC 0111 short lesson, about 20 seconds
Income: Normal and Inferior Goods
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The idea
For a normal good, demand rises when income rises. For an inferior good, demand falls when income rises, because buyers move to something they prefer.
In practice
Higher income raises demand for fresh fruit and lowers it for canned.
Where people slip
Inferior does not mean poor quality. It is defined only by which way demand moves when income moves.
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