Normal Good

A normal good is a good whose demand increases when the consumer's income increases. This is because as consumers' incomes rise, they are able to afford to purchase more of the good. Normal goods are in contrast to inferior goods, whose demand decreases when the consumer's income increases.

The demand for a normal good is also affected by the price of the good. As the price of a normal good increases, the demand for the good will decrease. This is because consumers will substitute other goods for the normal good that is now more expensive.

The income elasticity of demand for a normal good is positive. This means that the demand for the good increases as the consumer's income increases. The income elasticity of demand is a measure of the responsiveness of demand to changes in income.

The price elasticity of demand for a normal good is negative. This means that the demand for the good decreases as the price of the good increases. The price elasticity of demand is a measure of the responsiveness of demand to changes in price.

Normal goods are an important part of the economy. They make up a large portion of consumer spending and they are essential for economic growth.