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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Again, the word inferior means nothing other than that the income elasticity of demand for that good is observed to be negative. It does not necessarily indicate anything at all about the quality of that good.
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4.3. Income Elasticity of Demand: Normal and Inferior Goods
se in income, they buy absolutely less of some goods, and they buy more when their income falls. Hence, income elasticity of demand for those goods is negative. By definition, goods with negative income elasticity are called inferior goods . <span>Again, the word inferior means nothing other than that the income elasticity of demand for that good is observed to be negative. It does not necessarily indicate anything at all about the quality of that good. Typical examples of inferior goods might be rice, potatoes, or less expensive cuts of meat. One study found that income elasticity of demand for beer is slightly negative, whereas incom


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