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INFERIOR GOOD

17 April, 2015 - 17:30

An increase in income will generally cause the consumption of most goods to increase: these goods are said to be normal (or superior) goods. There are a few goods for which the pattern is reversed: an increase in income causes a decrease in consumption. These goods are known as inferior or Giffen goods. Most often, these inferior goods are tied in the mind of individuals to hard times.