Can a good be normal anda inferior at the same time?

Solutions

Expert Solution

Normal good refers to the good which has a direct relation to the income or in other words is positively related to the income. As the income increases the consumption of the good increases.

Inferior good refers to the good which is inversely related to the income. As the income increases the individual tends to consume less and less of the good. Eg: barley.

A good cannot be inferior and normal at the same time . The reason being that its consumption can either increase or reduce. Both these goods are mutually exclusive. So for a particular individual the good can be either inferior or normal.

However when the case is of two individuals, it can be both normal and inferior good. Normal good for one and inferior for another.

We will see this with an example

Suppose that trains are a consumption good.

Individual A would consume more of it when income increases rather than walking by foot. On the other hand individual B would reduce its consumption when the income increases and prefer cabs. So it is inferior for him .

Hence a good cannot be inferior and normal together for an individual. However a good which is normal for one could be inferior for another at the same time.

(You can comment for doubts)

Rahul Sunny answered 1 year ago

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