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Normal Good

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PPGPortal > Home > Concept Dictionary > N, O > Normal Good

Normal Good 

A good for which demand increases as income rises. The vast majority of goods are normal goods.

(Dwayne Benjamin, Toronto PPG 1002H)


It is intuitive that most goods are normal goods because we know that people tend to consume more as their incomes rise. Although most goods are normal goods, there are exceptions. One can easily think of several goods that many consumers purchase less of as their income rises. For example, imagine a student who eats several meals of inexpensive macaroni and cheese each month because it is so cheap. When this student graduates and gets a full time job and sees his incomes rise significantly, he will probably begin to eat more of other things and eat fewer meals of inexpensive macaroni and cheese. In this example, inexpensive macaroni and cheese is a good that is "inferior" rather than "normal" because the consumer’s consumption goes down as his income rises.


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