+1 vote
in Class 12 by kratos

Does a fall in income have the same affect on demand for the given commodity?

1 Answer

+2 votes
by kratos
 
Best answer

No, fall in income does not have the same effect on demand for the given commodity.

(i) If the given commodity is a normal good then fall in income will reduce the demand for the normal good.

(ii) If the given commodity is an inferior good then fall in income will raise the demand for inferior good.

(iii) If the given commodity is a necessity then fall in income will not change the demand of necessity good.

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