Question

Over time, some goods change from being a normal good to an inferior good, or from being an inferior good to a normal good. one example is a crt television, also known as a tube television. in the 1980s, households with more income usually purchased crt tvs. today, more crt tvs are purchased by households with less income. what has happened to crt tvs?

Answer 1

The CRT TV becomes an inferior good because the good becomes perceived as being of lower quality than a flat screen TV. Inferior goods are goods whose demand decreases when consumer income rises or their demand decreases when the consumer income decreases unlike normal goods. The demand of such goods declines as the level of income or real GDP in the economy increases. Normal goods experiences an increase in demand along with increase in the income level.