Explain how do the following influece demand for a good : (i) Rise in income of the consumer , (ii) Fall in prices of the related goods.

Explain how do the following influece demand for a good : (i) Rise in

1.	Explain how do the following influece demand for a good : (i) Rise in income of the consumer , (ii) Fall in prices of the related goods.
Answer» <html><body><p></p>Solution :(i) In case the good is a normal good, a rise in <a href="https://interviewquestions.tuteehub.com/tag/income-25499" style="font-weight:bold;" target="_blank" title="Click to know more about INCOME">INCOME</a> of the consumer leads to an <a href="https://interviewquestions.tuteehub.com/tag/increase-1040383" style="font-weight:bold;" target="_blank" title="Click to know more about INCREASE">INCREASE</a> in demand for the good. <br/>If the good is an <a href="https://interviewquestions.tuteehub.com/tag/inferior-515744" style="font-weight:bold;" target="_blank" title="Click to know more about INFERIOR">INFERIOR</a> good, a rise in income of the consumer leads to a decrease in demand of the commodity. <br/>(ii) If the <a href="https://interviewquestions.tuteehub.com/tag/two-714195" style="font-weight:bold;" target="_blank" title="Click to know more about TWO">TWO</a> goods are substitues, then a fall in price of <a href="https://interviewquestions.tuteehub.com/tag/one-585732" style="font-weight:bold;" target="_blank" title="Click to know more about ONE">ONE</a> good leads to fall in demand of the other good. On the other hand, if the two goods are complementary goods, a fall in price of one good leads to an increase in demand of the other good.</body></html>