[Note: The distance between cities in California (US) distance chart below is straight line distance (may be called as flying or air distance) between the two locations in California (US) calculated based on their latitudes and longitudes. This distance may be very much different from the actual travel distance.]
In drawing the demand schedule or the demand curve for a good we take income of the people as given and constant. When as a result of the rise in the income of the people, the demand increases, the whole of the demand curve shifts upward and vice versa. The greater income means the greater purchasing power.
How does the price range affect the elasticity of demand for a product? Demand for a good can be inelastic at a low price, but elastic at a high price If prices rise, but income stays the same, what is the effect on the quantity demanded? The quantity of demand decreases What effect does the availability of many substitutes have on the elasticity of demand for a good? Demand is elastic If prices rise, but income stays the same, what is the effect on demand?