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Getting Started The Case of the Perverse Demand Curve What is a normal good? What do potatoes and Rolls Royces have in common? Every year, students of economics become confused about the answers to these seemingly innocuous questions. In this column we hope to relieve this confusion through explanation. By now you will be familiar with the 'law of demand', which tells us that the price of a commodity and the quantity demanded are inversely related. I expect you will also have been told about some possible 'exceptions' to this law- It is important to appreciate the significance (or otherwise) of these 'exceptions' since the law of downward-sloping demand is a cornerstone of economics. We should know under what conditions it may fail. In order to enable you to understand why consumers respond to price changes in the way they do, your teacher may have introduced you to concepts such as 'income effects',...

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