Ordinary good

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Ordinary good

An ordinary good is a microeconomic

Microeconomics

Microeconomics is a branch of economics that studies how individuals, households and firms and some states make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold....
concept used in consumer theory

Consumer theory

Consumer theory is a theory of microeconomics that relates preferences to supply and demand. The link between personal preferences, consumption, and the demand curve is one of the most complex relations in economics....
. It is defined as a good

Good (economics and accounting)

In economics, a good is any object or service that increases utility, directly or indirectly. It should not to be confused with the adjective "good", as used in a moral or ethics sense....
which creates increased demand when the price for the good drops or conversely decreased demand if the price for the good increases, ceteris paribus
Ceteris paribus

is a Latin phrase, literally translated as "with other things the same." It is commonly rendered in English as "all other things being equal." A prediction, or a statement about causal relation or logical connections between two states of affairs, is qualified by ceteris paribus in order to acknowledge, and to rule out, the possibil...
. It is the opposite of a Giffen good

Giffen good

In economics and consumer theory, a Giffen good is that which people consume more of as price rises, violating the law of demand. In normal situations, as the price of such a good rises, the Consumer theory#Substitution effect causes people to purchase less of it and more of substitute goods....
.

Since the existence of Giffen goods outside the realm of economic theory is still contested, the pairing of Giffen goods with ordinary goods has gotten less traction in economics textbooks than the pairing normal good

Normal good

In economics, normal goods are any Good s for which demand increases when income increases and falls when income decreases but price remains constant, i.e....
/inferior good

Inferior good

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Encyclopedia

An ordinary good is a microeconomic

Microeconomics

Consumer theory

Good (economics and accounting)

Giffen good

Normal good

In economics, normal goods are any Good s for which demand increases when income increases and falls when income decreases but price remains constant, i.e....
/inferior good

Inferior good

In consumer theory, an inferior good is a good that decreases in demand when consumer income rises, unlike normal goods, for which the opposite is observed....
used to distinguish responses to income changes. The usage of "ordinary good" is still useful since it allows a simple representation of price and income changes. A normal good is always ordinary, while an ordinary good can be either normal or inferior.

Distinction between income and price effects

Income change			Price change
	Normal good Normal good In economics, normal goods are any Good s for which demand increases when income increases and falls when income decreases but price remains constant, i.e....	Inferior good Inferior good In consumer theory, an inferior good is a good that decreases in demand when consumer income rises, unlike normal goods, for which the opposite is observed....		Ordinary good	Giffen good Giffen good In economics and consumer theory, a Giffen good is that which people consume more of as price rises, violating the law of demand. In normal situations, as the price of such a good rises, the Consumer theory#Substitution effect causes people to purchase less of it and more of substitute goods....
Income up	Consumption up	Consumption down	Price up	Consumption down	Consumption up
Income down	Consumption down	Consumption up	Price down	Consumption up	Consumption down

Ordinary good

Distinction between income and price effects

See also