Demand:
“Any desire that is able to pay”
* Desires
* Ability to pay
Income effect on demand:
Main effect on demand is income or ability to pay, consumer purchase goods or services for his satisfaction under his income level but doesn’t complete his satisfaction.
Mathematically
Qdx = f(px) M, Po, T
f = Function of
px = Price of x
M = Income of the consumer
Po = Price other thing
T = Taste, Habits
“Any desire that is able to pay”
* Desires
* Ability to pay
Income effect on demand:
Main effect on demand is income or ability to pay, consumer purchase goods or services for his satisfaction under his income level but doesn’t complete his satisfaction.
Mathematically
Qdx = f(px) M, Po, T
f = Function of
px = Price of x
M = Income of the consumer
Po = Price other thing
T = Taste, Habits
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