Advertisements
Advertisements
प्रश्न
What is meant by the income effect of a fall in the prices of a commodity?
Explain how income effect is responsible for the negative slope of the demand curve.
Advertisements
उत्तर
A change in demand due to change in real income resulting from change in the price of a commodity is known as the income effect. For example, a fall in the price of a commodity increases the real income, i.e., the purchasing power of the given money income increases. The consumer can now afford to buy more of the commodity with his given money income. Accordingly demand for the commodity increases.
संबंधित प्रश्न
Briefly explain any two reasons for the occurrence of the law of demand.
The Law of Demand was introduced by ______.
State with reason whether you agree or disagree with the following statement.
There is an inverse relationship between price and demand.
In case of relatively more elastic demand, the shape of the curve is
State with reason whether you agree or disagree with the following statement :
When price of Giffen goods fall, the demand for it increases.
If with the rise in price of good Y, demand for good X rises, the two goods are:
Giffen goods are richman's goods
State the law of demand.
State whether the following statement is true or false. Give reasons.
The law of demand states a direct relationship between price and demand.
Which formula correctly expresses the factors that determine the demand for a commodity?
