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Normal goods

The demand for this type of good increases as income rises. The opposite of an inferior good.

Below is a diagram to show the demand curve for a normal good and how the demand curve changes to changes in income. If the real income increases this causes the demand for normal goods to rise, this is because consumers have a large amount of income to buy the goods that they wish to purchase. A decrease in real income will cause the demand curve to shift in as consumers have to switch to inferior goods as their ability to purchase normal goods is reduced.

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