Consumption curve
Channel: Werner Lost
Date: 2012-01-02

Autonomous consumption is represented by the vertical intercept, while the slope of the line is determined by the marginal propensity to consume.  The marginal propensity to consume is less than one indicating that an increase in income increases consumer spending, but the increase in consumer spending is less than the increase in income.  A hunderd rand increase in income increases consumption spending with less than a hunderd rand. 

The slope of the consumption curve is equal to the change in consumption divided by the change in income