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Economic Definition of superior good. Defined.

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Term superior good Definition: A good for which an increase in income causes an increase in demand, and the income elasticity of demand is positive and greater than one. A superior good, also termed a luxury good, is a special type of normal good. Like a normal good an increase in income causes a rightward shift in the demand curve. However, a superior good has the added distinction that the income elasticity of demand is greater than one. In words, people don't just buy more of a superior good, they buy a LOT more.

 

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