What are inferior goods?
- Inferior goods are products that decrease in demand, even when the income of people rises.
How Do I Remember it?
- Remember “inferior goods” by associating them with a decrease in demand when incomes go up. When people have more money, they often prefer to switch to higher-quality alternatives, leading to a decline in the demand for inferior goods.
Real World Example
- Examples of inferior goods are low-quality clothing, boxed and canned food and no-name brands of staple products.
- Say you’re shopping at Ralph’s and are on the jam aisle. You see that there are two brands of Jam. There is the store brand Jam (Ralphs) and a named brand jam, “Smuckers.” The store brand jam would be considered an inferior good compared to the brand named jam which is considered a normal good.
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By: Ryan Aquino
