Consumer Choice, Income and Substitution Effect, Microeconomics
Whenever policy makers want to measure the impact of a change in prices on consumers, welfare analysis comes into play. Given that reforms adopted can either create or destroy value, an assessment is needed of whether the measure taken will increase or decrease the...
Income and Substitution Effect, Microeconomics, Network Externality
Tell me at the first instance how can you comprehend the Work NETWORK EXTERNALITY ? By Network, we mean Individuals. And Externality is a cost or benefit that is incurred not on your choice. In Economics, Network Externality is a case when people’s demand is dependent...
Giffen Good, Income and Substitution Effect, Microeconomics
The Giffen Good is although a rare case yet still has valid possibilities. By definition: Giffen Good is a special case where the Demand Curve Slopes Upward because the Income effect is greater than the Substitution Effect In this case, the Income effect is...
Income and Substitution Effect, Microeconomics
Income and Substitution Effects Let us assume there is a decrease in the price of a product. This will have two effects: Consumer will prefer buying more of that good because it has become cheaper and he/she will decrease the demand for those goods which are now...
Income and Substitution Effect, Microeconomics, Price Consumption Curve
We have been discussing about Demand curve of product with changes in its price and Quantity Demanded depending on different Situation. Let us now be more concerned about Individual Consumer Demand Curve whose decision are affected by the limited budget it has....
