NORMAL AND

INFERIOR GOODS
BY: SHREYA NAMANA
CLASS: 11 ‘C’
ROLL NO.: 42
 NORMAL GOODS:
 Normal goods refer to those goods whose
demand increases with an increase in income.
 Example: If the demand for a car increases with
a rise in income, then car will be called a
normal good.
NORMAL GOODS GRAPH
Income(in rupees)

Demand of Car(in units)

 INFERIOR GOODS:
 Inferior goods refer to those whose demand
decreases with an increase in income.
 Example: if the income of a consumer rises and
they prefer to replace their Ford ikon car with any
BMW car, then demand for the Ford ikon car with
fall. In such case, Ford ikon car is an inferior good.
INFERIOR GOODS GRAPH
Income(in rupees)

Demand of Ford ikon car(in units)

NORMAL GOODS VS INFERIOR GOODS
BASIS NORMAL GOODS INFERIOR GOODS

MEANING Normal goods refer to Inferior goods refer to

those goods whose those goods whose
demand increases with demand decreases with
an increase in income. an increase in income.
INCOME Income effect is positive. Income effect is negative.
EFFECT

RELATION There is a direct relation There is an inverse

between income and relation between income
demand for normal and demand in inferior
goods. goods.
EXAMPLE Color TV Black and white TV
 NECESSITY GOODS
• Necessity goods refer to those goods for which
there is no change in demand with a change in
the income of consumer.
• Example: salt, wheat flour, medicines and more.
• These goods are essential for human existence
and, therefore, they occupy a higher place in the
consumers’ order of preference.