Assignment is all about inferior goods like noodles, coffee, public transport & its significance in the recession

Home, - Normal & Inferior Goods


An inferior good is those types of products which price varies based on the income of the consumers. Therefore, as it is based on the income of the customers of that particular country. Hence, it is clear that it can have an impact on the economic structure of the country. Therefore, an inferior good is the product whose demand decreases when the income rises of the consumers. On the other hand, the demand increases when the income of the consumers decreases.

Example of inferior goods 

There are many examples of the inferior goods. There are some of the inferior goods with which most of the people are familiar such as noodles, coffee, public transport and so on.

 For instance, there are two types of flour such as wheat flour and jowar flour. Now, if the income of the consumer is going low then they can buy the product which is a little lower than the other one. Therefore, if the income of the client rises than that person can able to buy the wheat flour which is a little costly than the Jowar flour.  

Coffee is one of the most used inferior goods. Most of the people in the UK are using coffee as their morning drink. Then it will be easy as it can take for the example which is linked with the recessions and expansion of the economic structure. A McDonald coffee can be an example of the inferior good in comparison with the Starbucks coffee. Hence, when the income drops the customer can find the substitute of the coffee from McDonald's.

One of the classic examples of the inferior good is the transport system the customer choosing bus when the income decreases. On the other side when the income increases then instead of a bus that customer can able to buy a car. Therefore, when the people cannot able to afford a taxi or a car, then that person choose the bus in order to reach the destination.

The off brand products and the expensive name brand products are the examples of the inferior goods.  The income is low then the customer can choose a product which is not from the expensive brand. Therefore, when the income increase the customer can buy from the expensive brand.

Impact of inferior goods in recessions and   expansions 

Inferior goods are that kind of products which are not purchased during the time of the high income (Nakamura, 2016). Therefore, the average customer has less demand for the inferior goods. Hence, this can be represented by a backward bend in the expansion path of the income source. As a result of this, it can easy to understand that inferior goods have an impact on the negative income elasticity in order to fulfill the demand.

The retailers are trying to predict the future behaviour of the consumers and the demand function of the market. This income expansion path is based on the price offer curve (Barth, Finseraas, & Moene, 2015). This price offer curve is important as there is no such strategy to calculate the behavior. This price offer curve indicates the demand behavior of the consumers. The inferior goods can help the consumers during the time of the recession. The increase in the demand decreases the income and on the other hand decrease the income increase the income. Hence, this is directly connected to the economic structure of this country.

On the other hand, during the time of recession inferior goods become of the most demandable thing in this country. In recession time the income of the consumer decreases and as a result of this, it can easy to understand that the consumer wants to buy the products in a lower cost (Bergh & Nilsson, 2014). Therefore, the demand increases of those inferior products during the recession time. Hence, the supermarkets may push the cheaper as there will be a high demand for these inferior goods. In addition to this, the recessions can be good for the pound shop which basically concentrates on the value of the goods. However, the increasing income can be the reason for the falling demand for the inferior goods and the firms can give a better supply for the better and high quality of the product.

In the time of recession, the demand for the normal goods decreases as the income of the consumer's decreases (Rasmussen et al., 2017). Therefore, in the recession, the demand of the inferior goods increase as the consumers wants to get the product in a lower amount of price.


Therefore, after the study, it can be concluded that the inferior goods are helpful for the consumers during the time of the recession. The consumers can able to get the inferior goods with a minimum amount of money. This study also provides some example which can help to understand about the importance of the inferior goods in the daily life. There are many goods which are useful in our daily lives. Therefore, when the income decreases more in the recession time the people, of that country need to depend on the inferior goods. Hence, during the time of the recession, the demand for the inferior goods as the consumers is not able to buy the goods from the expensive brands. The inferior goods are helpful for the customers in order to complete the needs during the time of the recession. The income of a person is connected with the demand of the inferior goods.

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