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

rivalrous good and non-excludable good
complement good vs. substitute good
free good vs. positional good

(non-)durable good - intermediate good (producer good) - final good - capital good
inferior good - normal good - ordinary good - Giffen good - luxury good - Veblen good - superior good
search good - (post-)experience good - merit good - credence good - demerit good - composite good