Which type of good sees an increase in demand as income rises?

Normal goods are defined as those goods for which demand increases as consumer income rises. This phenomenon occurs because as people have more income, they typically have a greater ability to purchase goods and services, leading them to buy more of those higher-quality or more desirable products. Examples include luxury items, organic foods, and branded clothing, which people are more likely to buy when they can afford to do so.

In contrast, inferior goods are those that see a decrease in demand as income increases; consumers typically opt for higher-quality substitutes when their income allows. Supplementary (or complementary) goods have a relationship where the demand for one good increases when the price of its complementary good decreases, rather than being directly tied to income levels. Substitute goods can replace one another based on price changes or preferences but do not have a direct relationship with income in the way that normal goods do.

Understanding this distinction between different types of goods is essential in microeconomics, as it helps explain consumer behavior in relation to income changes.