Income Elasticity Simulator

Income Elasticity of Demand: Normal Goods vs. Inferior Goods

Branded Clothes (Normal Good)
Quantity Demanded (Q) Price (P) 100 100 D
Unbranded Clothes (Inferior Good)
Quantity Demanded (Q) Price (P) 100 100 D
Consumer Income (Y) 100 Baseline: 100
Left Graph Q_A 100 Same Dir. (YED > 0)
Right Graph Q_B 100 Opp. Dir. (YED < 0)
Current Effect Baseline Fixed Price P = 100
Income Y: 100
Consumer Income (Y) 100 Baseline: 100
Left Graph Q_A 100 Same Dir. (YED > 0)
Right Graph Q_B 100 Opp. Dir. (YED < 0)
Current Effect Baseline Fixed Price P = 100

Income Elasticity Breakdown

1. Left Graph (Normal Good) - Direct Relationship As Income Y increases, Demand shifts RIGHT (Q_A = 100)
2. Right Graph (Inferior Good) - Inverse Relationship As Income Y increases, Demand shifts LEFT (Q_B = 100)
3. Elasticity Coefficients Comparison YED_Normal > 0 (Positive) | YED_Inferior < 0 (Negative)
4. Key Economic Principle Normal goods see higher demand with higher purchasing power, whereas consumers switch away from inferior goods when income rises.