I have a question on Inferior and normal goods. Let say you were at a outlet store Tanger outlets. ?

Question

And you have to pick 5 stores from that outlet. Which Stores would sale the inferior goods and which would be the normal goods? For example, would you call Sunglass Hut that sells sunglasses a inferior good?!? Just asking since i need help with something!

http://www.tangeroutlet.com/washington

Answer 1

Most stores sell normal goods that is, goods for which expenditures increase proportionally or less then proportionally as income goes up.

Stores selling inferior goods:

Subway

Easy Spirit Outlet

Stores selling superior goods:

MAKANA COFFEE & TEA

Bose Factory Store

Superior goods make up a larger proportion of consumption as income rises, and as such are a type of normal goods in consumer theory. A superior good may be a luxury good (smoked salmon and caviar) that is not purchased at all below a certain level of income or it may have a wide quality distribution (wine or holidays) - though the number of such goods consumed may stay constant even with rising wealth, the level of spending will go up, to secure a better experience.

Sunglass Hut is tricky - you can get a lot of glasses under $100 (see http://www.sunglasshut.com/sgh/catalog.j... but also BVLGARI glasses for $715 (http://www.sunglasshut.com/sgh/catalog.j... So the same store can sell BOTH inferior, normal, and even superior goods.