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What are goods?

Goods are the products that are madeto fulfill

the market needs and can be sold by a

seller toa buyer for some monetary value.

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Types of goods

Related to income Related to

price

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Related to income

INFERIOR GOODS

NORMAL GOODS

SUPERIOR GOODS

LUXURY GOODS

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Related to Income

Inferior Goods:

An inferior good means an increase in income causes afall in demand.

Inferior goods are those goods that have an inverserelationship with the consumers income

Example, of an inferior good is Tesco value bread.When your income rises you buy less Tesco valuebread and more high quality,

organic bread.

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Examples of Inferior goods

Inter-city bus service like BEST

Food- Ambemohar rice

Black and white T.V set- Onida B/W 15inch

Clothing- tailored simple shirt

Outdated mobile phone- Nokia 3315

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Normal goods:

A normal good is anything that you arewilling and able to buy when your incomeincreases or the price decreases.

Thus, its income elasticity will be positive.

Example would be movie tickets people

see more movies when they have moredisposable income, and cut back whenthey're on a budget.

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Examples of Normal goods

Movie tickets- Special Class @ Cinemax

Two wheeler- Kinetic Scooty

Clothing- DJ &C

Laptop- Acer TravelMate 525TX

Restaurant/ Food outlet- JumboKing

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Superior Goods

Goods that will tend to make up a largerproportion of consumption as income rises.

As such, they are an extreme form of

normal good.

Superior good is a good/service that youare more likely to purchase as your

expendable income increases.

Example: A New Car

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Examples of Superior goods

Movie tickets- Red Lounge @ Cinemax

Two wheeler- Honda CBR250

Clothing- Satya Paul collection

Entertainment- SONY PSP- II

Food Outlet- Pizza Hut

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Luxury Goods

Luxury goods are those goods forwhich demand increases at a greaterpercentage with an increase in consumers

income.

Example, high Definition TVs would be

luxury. When income rises, people spend a

higher % of their income on the luxurygood.

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Examples of Luxury goods

Watches- Rolex premium collection

Four wheeler- Rolls Royce

Designer Clothing- Verace

Entertainment- SONY Bravia HDL-

55HX925

Tablet PC- Samsung Galaxy tab

Back to type of goods

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Related To Price

ORDINARY GOODS

GIFFEN GOODS

VEBLEN GOODS

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Ordinary goods:

Goods for which quantity demanded

increases as the price for the good

drops, conversely, quantity

demanded decreases as the price for

the good increases.

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Examples of Ordinary goods

Laptops- Compaq

Camera- Sony Cyber-shot DSC-TX1 10.2MP

Jewellery- TBZ

Beverages- Mountain dew

Four Wheeler- Maruti Suzuki Swift VXi

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Giffen Goods

A Giffen goods is one which peopleparadoxically consume more of as the pricerises, violating the law of demand.

In the Giffen good situation the incomeeffect dominates, leading people to buymore of the good, even as its price rises.

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Examples of Giffen goods

Rice- HMT (people buy it for basic nutritionby and cutting short expense for fruits)

Gold in recession

Equities in inflation

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Veblen Goods

Veblen goods are those goods for whichincreased prices will increase quantitydemanded.

Example Some types of high-status goods,such as high-end wines, designerhandbags and luxury cars, are Veblen

goods.

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Examples of Veblen goods

Watches- Rolex premium collection

Four wheeler- Rolls Royce

Designer Clothing- Verace

Mobiles- Apple iPhone

Pen- Parker