Question

Over time, some goods change from being a normal good to an inferior good, or from being an inferior good to a normal good. one example is a crt television, also known as a tube television. in the 1980s, households with more income usually purchased crt tvs. today, more crt tvs are purchased by households with less income. what has happened to crt tvs?

Answer 1

CRT TVs have become an inferior good over time, with demand decreasing as incomes rise because consumers prefer more advanced television options.

Step-by-step explanation:

CRT televisions, once a popular consumer choice, have undergone a shift in demand relative to consumer income. During the 1980s, CRTs were considered a normal good because their demand increased with rising incomes. Over the years, as more advanced television technologies like LED and Smart TVs became available and desired, CRT TVs transitioned into being an inferior good. This means that as household incomes rise, people are more likely to purchase the newer, more expensive television options, reducing the demand for CRT TVs. Now, CRT TVs are more commonly purchased by households with lower incomes that cannot afford or choose not to spend on advanced television options. The inferior good status of CRT TVs is a reflection of consumer preference for higher-end goods as their purchasing power increases.

Answer 2

The CRT TV becomes an inferior good because the good becomes perceived as being of lower quality than a flat screen TV. Inferior goods are goods whose demand decreases when consumer income rises or their demand decreases when the consumer income decreases unlike normal goods. The demand of such goods declines as the level of income or real GDP in the economy increases. Normal goods experiences an increase in demand along with increase in the income level.