We can see that in 2005 there were more zinc batteries sales, 80 million, than any other given years, followed by 2006, 76 million. In 2007 we can see sales dropping further to 69 million, and 2008 declined more to 65 million. In 2009 we can see sales picking up again to 69 million. Although in year 2005 and 2006, there were more sales of zinc batteries, but we can see that alkaline batteries are still the most popular batteries with most sales, (see figure 29). This is because alkaline batteries are good quality and stay longer than zinc batteries.
The decrease in sales in 2007 to 2008 can be due to recession, people did not have a lot of money, so they were saving by eying long lasting batteries, alkaline batteries, hence we see that alkaline batteries had most sales in 2007 and 2008, (Figure 29). In 2009 the sales of zinc batteries picked up again, this is due to people recovering from recession. We can see that when zinc battery sales picked up in 2009, there is a drop in alkaline battery sales. This means people started to have money, and buying more zinc batteries, which are cheaper. This can be explained more in terms of income elasticity of demand.
Income elasticity of demand s the responsiveness of demand to changes in income. People tend to spend more on goods when they have money available. For example, in 2005, 2006, people were buying more zinc batteries because they had more money than in 2007 to 2008 during recession. Then after the recession years, sales started to pick up again. Although zinc battery sales picked up in 2009, and alkaline sales declined, but the most sales were alkaline batteries in all given years, question is why?. This can be explained in terms of normal goods and inferior goods.
In normal goods, demand rises as income rises, and vice versa. When people have more money, they spend more on expensive value goods than cheaper goods. Inferior goods demand falls as income rises, and vice versa. This means people spend more on cheaper goods when they have less money.