Saturday, March 20, 2010

Feeling "Inferior"? You are in good company

Goods that actually experience an increase in demand during a recession are called "Inferior" goods.  The definition of an inferior good is when Income DECREASES, as it tends to do during a downturn in the business cycle, or when incomes are low (like college students) the demand for the inferior good actually INCREASES (vice versa when Income INCREASES). This is not to say that the good is of poor quality, as a matter of fact, it may be quite the opposite.  Easy examples of inferior goods might be the category of generic brands of, well, anything.  This LINK (by way of MR)will take you to a site with more examples of potential inferior goods that we don't often call inferior.  What do you think? Should these be categorized as inferior?
The market for traditional sodas and juices is flat, but California-based Hansen has been logging record sales and earnings this year thanks to its expanding lineup of Monster Energy drinks. Innovations like resealable cans and clever spinoffs like the Anti-Gravity and Killer-B varieties have helped keep the brand fresh.
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