Necessity good
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In economics a necessity good is a type of normal good. Like any other normal good, when income rises, demand increases. But the increase for a necessity good is less than proportional to the rise in income, so the proportion of expenditure on these goods falls as income rises. This observation for food is known as Engel's law. The income elasticity of a necessity good is thus between zero and one.
[edit] See also
Types of goods
public good - private good - common good - common-pool resource - club good - anti-rival goods (non-)durable good - intermediate good (producer good) - final good - capital good |