A fall in the price of a good increases consumers' real income, making them more able to purchase all goods, so the quantity demanded increases. Consumer Income Prices of related goods Consumer Expectations Number and composition of the market. Consumer Income A demand curve assumes the level of consumer is fixed. If the income of consumers changes, then the purchasing power changes making consumers more able or less able to purchase. This means that consumers are willing and able to buy more units at each price and to pay more per unit at each quantity.
Most goods are normal goods.
A good is an inferior good when demand decreases as consumers' income rises. Engel's Law As early as the l8th century, economists have studied the relationship between income and consumption. The most widely referenced same data was compiled by an economist named Engel. In 1857, Engel surveyed 153 Belgian families about their consumption patterns and how that was influenced by changes in their income. The proportion of total expenditure devoted to food declines as income rises.