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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.
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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
Find the odd word
Assumptions to law of demand -
State with reason whether you agree or disagree with the following statement.
There is an inverse relationship between price and demand.
Increase in demand is caused by
The movement on or along the given demand curve is known as ______
When at a price of ₹ 5 per unit of a commodity, A's demand is for 11 units, B's demand is for 14 units and C's demand is for units (assuming that there are only three consumers in the market), the market demand is ______.
If a good is inferior good, then purchases of that good will decrease when ______.
Explain four circumstances under which the law of demand does not operate.
What does the term "ceteris paribus" mean in relation to the Law of Demand?
Which of the following is NOT an assumption of the Law of Demand ?
Why does the demand curve always slope downwards?
