A product is a good, service, or idea offered to satisfy a consumer’s want or need.
Types of Products
Identical Products
Products having the same characteristics. Consumers regard products from different firms as perfect substitutes.
Examples:
- Electricity supplied to the grid
- Wheat of the same grade
Differentiated Products
Products that satisfy similar wants but differ in quality, design, features, service, location, or brand image.
Examples:
- Smartphones
- Coffee shops
- Branded clothing
Normal Products
Quantity demanded increases when consumer income increases and decreases when income decreases.
For example: branded clothing.
Inferior Products
Quantity demanded decreases when consumer income increases and increases when income decreases.
For example: instant noodles.
Giffen Products
A special type of inferior product where, under certain conditions, an increase in price can cause quantity demanded to increase, resulting in an upward-sloping demand curve.
For example: bread among very poor households during the Irish potato famine.
Veblen Products
Luxury products for which a higher price may increase demand because the high price can signal status or exclusivity.
For example: luxury jewellery.
Substitute Products
Goods that can be used instead of one another.
For example: tea and coffee.
If the price of one substitute increases, demand for the other may increase.
Complementary Products
Goods that are normally consumed together.
For example: cars and petrol.
If the price of one complementary good increases, demand for the other may decrease.
Independent Products
Goods whose consumption does not significantly depend on the consumption of another good.
For example: salt and notebooks.
