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Inferior Goods : Goods for which the quantity demanded decreases when income increases. This is from the video “ The Demand Curve Shifts ” in the Principles of

Inferior Goods: Goods for which the quantity demanded decreases when income increases. This is from the video “The Demand Curve Shifts” in the Principles of Microeconomics course.

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Imagine that you're a poor student right now, but soon you'll graduate and get a high paying job. When you get that high paying job, when your income goes up, you're probably going to demand more automobiles, more housing, and more fine dining. These are all called normal goods because the demand for them goes up when incomes go up. And of course the demand for them goes down when incomes go down.


There are also goods, however, for which when your income goes up your demand for them actually goes down. Again when I was a poor student for instance, I actually sometimes went to McDonald's to buy a cheeseburger because it was cheap. When my income went up later, I ate at McDonald's less often and ate at better restaurants, which of course cost more. I haven't actually eaten at McDonald's for many years. An inferior good is one which when your income goes up the demand for it goes down, and vice versa. For instance, think about soup. Soup is a cheap and easy meal. So during a recession, the demand for soup may well go up. During boom times, the demand for soup may well go down.

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