In general, We know that if a good is normal, then as your income increases, then demand of that good increases as well as price is fixed. Similarly, if a good is inferior, then as your income increases, then the demand of good decreases while its price is fixed.

But I read a statement that tells

“ a decrease in the price of a good will cause the quantity demanded of that good to increase if the good is a normal good, and to decrease if the good is an inferior good”

I cannot understand this statement. how can I show it mathematically or graphically.

What do you think about this statement? Do you agree or not?


1 Answer 1


This means that as the quantity demanded for an inferior good falls as the price falls. An example of this is a good that is deemed to be “bad” if the price is bad. Consider a shirt at walmart that the public views as “cheap”. As the price for that good falls individuals expect that good to be worse and demand falls. Ordinarily with normal good the demand would rise as the price falls, but with a normal good the demand curve simply slopes downward as the price falls.

Graphically you can display this pattern with a supply and demand curve. Normally you would see the demand curve slope upward as price falls, but in the case of an inferior good you can simply show it graphically by having the demand curve slope downward as the price falls.


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