Question

What does the demand curve given below show?

Answer 1

The demand curve in the image illustrates the relationship between income (on the Y-axis) and demand (on the X-axis). The curve is upward-sloping, which indicates that as income increases, the demand for the good also increases. This is typical behaviour for normal goods.

1. Normal Goods: For normal goods, when consumers' income increases, they tend to buy more of these goods, leading to an increase in demand. The curve shows a positive relationship between income and demand, indicating that the good in question is likely normal.

2. Upward Sloping Curve: The upward sloping curve (D) represents how demand rises as income rises, reflecting the nature of normal goods where higher income leads to higher consumption.