Question
Explain the difference between an inferior good and a normal good.
OR
Distinguish between normal goods and inferior goods.
OR
Distinguish between normal goods and inferior goods.
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S. No.
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Basis
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Normal goods
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Inferior goods
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1.
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Income effect
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Normal goods have positive income effect.
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Inferior goods have negative income effect.
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2.
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Movement
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The demand curve for normal goods shifts to the right or left with the rise or fall in income respectively.
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The demand curve for inferior goods shifts to the left or right with rise or fall in income respectively.
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3.
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Example
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Full cream milk.
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Toned milk.
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