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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
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.
Explain the law of demand.
Any statement about demand for a good is considered complete only when the following is/are mentioned in it:
If with the rise in price of good Y, demand for good X rises, the two goods are:
Pick the option which does not belong to the group:
State the law of demand.
The following table shows the amount of sugar bought by a household at different prices:
| Period | Price (₹ per kg) | Amount Bought (kg) |
| Jan. 2000 | ₹ 15 | 4 |
| Feb. 2000 | ₹ 16 | 5 |
Does the behaviour of household contradict the law of demand? Give reasons in support of your answer.
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 ?
