explain the chain effects of increase in income of buyers of a commodity on its demand

The extent to which the demand for a commodity is influenced by the increase in income depends upon the nature of the good, that is, whether the good is a normal good or an inferior good.

 

(i) Normal Good

If the good is a normal good, then with increase in income, the demand for good increases.

Income Demand  

 

(ii) Inferior Good

If the good is an inferior good, then with increase in income the consumer’s demand falls for such goods.

Income Demand

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