Inferior+Goods


 * Inferior Goods **

__//Inferior goods//__ are unlike normal goods, in that the demand inferior goods decreases as income increases. For most goods the more income a household gains, the more of the good they will buy, however the opposite is true for inferior goods. Often times they are generic brands of products or are a low cost alternative to more expensive goods. For example SPAM is an inferior good because as income increases, the less SPAM households will want to buy because now they can actually afford steak. Inferior goods are products that are not necessarily always cheap, they are just products that will not be bought if the income of consumers' increase. The reason for this is because the only reason inferior goods are bought are because the consumer does not have enough money or resources to purchase better products. These better products usually cost more, but are also substitutions for inferior goods and these substitutions are generally more desired because they offer more benfit. This can include, traveling on a train insted of by plane because plane tickets are more expensive. Traveling by train is not really cheap either, but it is more time consuming and less desirable than traveling by plane, thus as consumer income increases train tickets are in less demand than plane tickets.

**Visual Examples**

Malt-o-meals are gereric and cheaper versions of popular cereals, like Coco Roos instead of Coco Puffs. These are a perfect examples of inferior goods because if consumers' income increases then they will definitely stop buying these cheap spin-offs and buy the real cereal.

media type="youtube" key="ofeBi6Au39s&hl=en&fs=1" height="344" width="425" This video clip represents an inferior good because as an individual's income increases the demand for Ipod Shuffles decreases, as consumers shift away from buying Shuffles and insted by the Ipod Touch or another high end music player.
 * Video **:

[|Inferior Goods on Wikipedia] [|Definition and Graph of Inferior Goods] [|Malt-o-Meals Website]
 * External Links **


 * Question:**

Multiple Choice- Which of the following is an inferior good?

A) Dinner at a restaurant B) Plane ticket C) Bus pass D) Cup of coffee from Starbucks E) Bottled water

[|Answer]