Explain the difference between an inferior good and a normal good. OR Distinguish between normal goods and inferior goods.

Differences between normal and inferior goods are: S. No. Basis Normal goods Inferior goods 1. Income effect Normal goods have positive income effect. Inferior goods have negative income effect. 2. Movement The demand curve for normal goods shifts to the right or left with the rise or fall in income respectively. The demand curve for inferior goods shifts to the left or right with rise or fall in income respectively. 3. Example Full cream milk. Toned milk.

Explain the difference between an inferior good and a normal good…

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Question

Explain the difference between an inferior good and a normal good.

Distinguish between normal goods and inferior goods.

✓

Answer

Differences between normal and inferior goods are:

S. No.	Basis	Normal goods	Inferior goods
1.	Income effect	Normal goods have positive income effect.	Inferior goods have negative income effect.
2.	Movement	The demand curve for normal goods shifts to the right or left with the rise or fall in income respectively.	The demand curve for inferior goods shifts to the left or right with rise or fall in income respectively.
3.	Example	Full cream milk.	Toned milk.