Ordinary good
From Market
This article defines a property of goods: a property that makes sense in the context of a good being bought and sold, and evaluated from the perspective of the buyer, seller, or others affected by it.
View other properties of goods
Contents
Definition
An ordinary good is a good satisfying the law of demand, which can be stated in the following equivalent forms:
- Its price elasticity of demand is negative (or at least nonpositive).
- ceteris paribus, an increase in the price leads to a decrease (or at least no increase) in the quantity demanded.
- ceteris paribus, a decrease in the price leads to an increase (or at least no decrease) in the quantity demanded.
Relation with other properties
Similar properties
- Normal good: A good for which the income elasticity of demand is positive (or, at least, nonnegative): as income increases, demand for the good either increases or stays constant.
Opposite properties
- Giffen good: A good for which the price elasticity of demand is positive: as the price increases, demand increases.
- Veblen good
