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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 -
The Law of Demand was introduced by ______.
Increase in demand is caused by
Distinguish between extension and contraction of demand.
State and explain the law of demand with the help of a hypothetical schedule and graph.
If with the rise in price of good Y, demand for good X rises, the two goods are:
Giffen goods are richman's goods
Pick the option which does not belong to the group:
State the law of demand.
Which of the following is NOT an assumption of the Law of Demand ?
