Question

As the Industrial Revolution spread and unfolded, more people had greater wealth. Define normal vs. inferior good. Are Louis Vuitton products normal or inferior. What reasons, on the demand side, existed that helped this firm grow during the 19th and early 20th centuries?

Answer 1

Normal good: When income of a person increases the demand for good too increases and decrease in income reduces demand

Inferior good: When income of a person increases the demand for good decreases and decrease in income increases demand

Louis Vuitton is a normal good and is considered as a superior luxury hand bag brand.

With the industrial revolution during 19th and 20th century with the increase in income, Louis Vuitton saw an opportunity to meet the demands of travel among the elite and affluent. Its high price of the product and the distribution of the product through licensed clothing retailers helped to create a high quality image of the product. It developed products by understanding the tastes and preferences of customers and its high price helped to compete against other low priced brands.