[This is part of the series: The Complete Guide To Economics 101.]
What is an inferior good?
In economics, an Inferior Good is a term for a good, or service, where demand decreases as income increases.
This is the opposite of a normal good.
Inferior goods are less common and are mostly comprised of lower end products and services.
For example, as one’s income increases:
- One might buy less cheap wine, preferring now expensive wine.
- One might buy less Ramen noodles, preferring fine pasta.
- One might buy fewer bus tickets, preferring to buy a car.
- And one might buy less factory furniture, now preferring handcrafted furniture.
