Question

Describe the organic pasta: Is it a normal/inferior good? Is it a necessity/luxury? Does it have complements / substitutes?

Answer 1

If we talk in simple terms in the word organic means chemical and pesticides free fruits and vegetables

So organic pasta means it is made from the organic wheat quality

Before understanding it that whether it is normal inferior or a necessity good we need to understand the income elasticity of demand

Income elasticity of demand says that as the income level of a consumer rises then his consumption increasesfor the normal goods

But if the good is inferior then as the income rises the quantity demanded will decrease by the consumer

Luxury goods are that type of good in which demand increases more proportionally as compared to income

Organic pasta will come under the normal goods and income elasticity of demand of it will be positive

Income elasticity of demand for inferior good is negative

2

Complements are those good which complete each other

For example bread and butter

Substitutes are those goods which can replace each other

For example tea and coffee

Yes organic pasta can also have substitutes like rice pasta, black bean pasta, squash noodles etc

It canalso have complements like tomato ketchup maiyonize etc