Demand & Law of Demand

There is an inverse relationship between the income of the consumer and demand of an inferior good. Consumers tend to buy less of an inferior good when they have more income and vice versa.

The graphical representation of
the demand function is called the
demand curve.

Utility is the want satisfying power of the commodity. The desire to purchage a commodity backed by ability and willingness to purchase is known as demand.

The change in the optimal quantity of a good when its price changes and the consumer’s income is adjusted so that she can just buy the bundle that she was buying before the price change is called the substitution effect.

A fall in price increases the real income of a consumer with the result that he buys more when the price falls and vice-versa.This leads to change in quantity demanded with the same money income of the consumer.