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प्रश्न
What is meant by the income effect of a fall in the prices of a commodity?
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उत्तर
A change in demand owing to change in real income arising from change in the price of a commodity is known as the income effect. For example, a decline in the price of a commodity improves 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 current salary. As a result, demand for the commodity increases.
संबंधित प्रश्न
Symbolically, the functional relationship between Demand and Price can be expressed as ______.
The Law of Demand was introduced by ______.
Explain the law of demand.
Write a statement of the Law of Demand.
The following table shows the demand schedule for 3 consumers in a market.
| Price in (Rs) | Consumer 1 Demand in (kgs) | Consumer 2 Demand in (kgs) | Consumer 3 Demand in (kgs) | Market Demand |
| 10 | 1 | 2 | (i) ______ | 6 |
| 8 | 2 | (ii) ______ | 4 | 9 |
| 6 | 3 | 4 | 5 | 12 |
| 4 | 4 | 5 | 6 | (iii) ______ |
Based on the above hypothetical schedule answer the following questions.
- What is the demand of Consumer 3 priced at Rs 10 (i)?
- What is the demand of Consumer 2 priced at Rs 8 (ii)?
- Calculate the total market demand priced at Rs 4 (iii).
- From the above given table examine the relationship between price and demand.
- Mention any one exception to the law of demand.
Any statement about demand for a good is considered complete only when the following is/are mentioned in it:
If prices of cars rise, many people may put off buying a new car. So the demand for petrol will fall.
If a good is inferior good, then purchases of that good will decrease when ______.
Pick the option which does not belong to the group:
Why does the demand curve always slope downwards?
