Normal good

A normal good is any type of good or service in which demand increases as income increases.

It is a term used in economics to study the different types of goods. Most goods and services belong to this category. The other type of goods are inferior goods.

In economic terms, normal goods comply with the  Normal Law of Demand , which argues that as  a person’s income increases  , the consumption of goods increases. For example, if a person has an income of 20,000 euros a year and you buy two pairs of shoes a year, if you raise your salary up to 60,000 euros a year, if your shoe consumption increases up to four pairs of shoes a year we can affirm that shoes behave like a normal good.

Characteristics of normal assets

In economics, normal goods are characterized by the positive variation suffered by the demand for these products as consumer income increases.

  • An increase in people’s income causes an increase in the quantity demanded of the normal good, that is, the increase in people’s income has a  positive income elasticity effect  , the greater the budget of an older person is the consumption of normal good.
  • An increase in the price of normal goods causes a negative effect on demand, that is, by raising the price of a normal good, consumers will reduce the consumption of that good. Therefore, the curve of this demand will always be negative or zero, in the case of normal goods with perfect elasticity.

Types of normal goods

There are two types of normal goods, depending on the speed at which consumption increases as consumer income increases:

  • Essential goods: Their demand is growing at a slower rate than the income of consumers. For example, bread, milk, eggs, etc.
  • Luxury goods or higher:  Your demand increases faster than the income of consumers. It occurs, above all, in leisure services, clothing, meat, fish, etc.

Demand curves of a normal good

All normal goods are characterized because the increase in people’s income increases their demand for inferior goods.

The demand curve for normal goods is the same as the curve for inferior goods other than Giffen, that is, when the price of a normal good increases, its demand decreases.


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