The inverse relationship between price of the commodity and quantity demanded for that commodity is because of the following reasons:
(i) Income effect:
(a) Quantity demanded of a commodity changes due to change in purchasing power (real income), caused by change in price of a commodity is called Income Effect.
(b) Any change in the price of a commodity affects the purchasing power or real income of the consumers although his money income remains the same.
(c) Whenpriceofa commodity rise more has to be spent on purchase of the same quantity of that commodity. Thus, rise in price of commodity leads to fall in real income, which will thereby reduce quantity demanded is known as Income effect.
(ii) Substitution effect:
(a) It refers to substitution of one commodity in place of another commodity when it becomes relatively cheaper.
(b) A rise in price of the commodity let coke, also means that price of its substitute, let Pepsi, has fallen in relation to that of coke, even though the price of Pepsi remains unchanged. So, people will buy more of Pepsi and less of coke when price of coke rises.
(c) In other words, consumers will substitute Pepsi for coke. This is called Substitution effect.
Price effect = Income effect + Substitution effect
(iii) Law of Diminishing Marginal Utility:
(a) This law states that when a consumer consumes more and more units of a commodity, every additional unit of a commodity gives lesser and lesser satisfaction and marginal utility decreases.
(b) The consumer consumes a commodity till marginal utility (benefit)he gets equals to the price (cost)they pay, i.e., where benefit = cost.
(c) For example, a thirsty man gets the maximum satisfaction (utility)from the first glass of water. Lesser utility from the 2nd glass of water, still lesser from the 3rd glass of water and so on. Clearly, if a consumer wants to buy more units of the commodity,he would like to do so at a lower price. Since, the utility derived from additional unit is lower.
(iv) Additional consumer:
(a) When price of a commodity falls, two effects are quite possible:
1. New consumers, that is, consumers that were not able to afford a commodity previously, starts demanding it at a lower price.
2. Old consumers of the commodity starts demanding more of the same commodity by spending the same amount of money.
(b) As the result of old and new buyers push up the demand for a commodity when price falls.

The inverse relationship between price of the commodity and quantity demanded for that commodity is because of the following reasons:
(i) Income effect:
(a) Quantity demanded of a commodity changes due to change in purchasing power (real income), caused by change in price of a commodity is called Income Effect.
(b) Any change in the price of a commodity affects the purchasing power or real income of the consumers although his money income remains the same.
(c) Whenpriceofa commodity rise more has to be spent on purchase of the same quantity of that commodity. Thus, rise in price of commodity leads to fall in real income, which will thereby reduce quantity demanded is known as Income effect.
(ii) Substitution effect:
(a) It refers to substitution of one commodity in place of another commodity when it becomes relatively cheaper.
(b) A rise in price of the commodity let coke, also means that price of its substitute, let Pepsi, has fallen in relation to that of coke, even though the price of Pepsi remains unchanged. So, people will buy more of Pepsi and less of coke when price of coke rises.
(c) In other words, consumers will substitute Pepsi for coke. This is called Substitution effect.
Price effect = Income effect + Substitution effect
(iii) Law of Diminishing Marginal Utility:
(a) This law states that when a consumer consumes more and more units of a commodity, every additional unit of a commodity gives lesser and lesser satisfaction and marginal utility decreases.
(b) The consumer consumes a commodity till marginal utility (benefit)he gets equals to the price (cost)they pay, i.e., where benefit = cost.
(c) For example, a thirsty man gets the maximum satisfaction (utility)from the first glass of water. Lesser utility from the 2nd glass of water, still lesser from the 3rd glass of water and so on. Clearly, if a consumer wants to buy more units of the commodity,he would like to do so at a lower price. Since, the utility derived from additional unit is lower.
(iv) Additional consumer:
(a) When price of a commodity falls, two effects are quite possible:
1. New consumers, that is, consumers that were not able to afford a commodity previously, starts demanding it at a lower price.
2. Old consumers of the commodity starts demanding more of the same commodity by spending the same amount of money.
(b) As the result of old and new buyers push up the demand for a commodity when price falls.

The inverse relationship between price of the commodity and quantity demanded for that commodity is because of the following reasons:
(i) Income effect:
(a) Quantity demanded of a commodity changes due to change in purchasing power (real income), caused by change in price of a commodity is called Income Effect.
(b) Any change in the price of a commodity affects the purchasing power or real income of the consumers although his money income remains the same.
(c) Whenpriceofa commodity rise more has to be spent on purchase of the same quantity of that commodity. Thus, rise in price of commodity leads to fall in real income, which will thereby reduce quantity demanded is known as Income effect.
(ii) Substitution effect:
(a) It refers to substitution of one commodity in place of another commodity when it becomes relatively cheaper.
(b) A rise in price of the commodity let coke, also means that price of its substitute, let Pepsi, has fallen in relation to that of coke, even though the price of Pepsi remains unchanged. So, people will buy more of Pepsi and less of coke when price of coke rises.
(c) In other words, consumers will substitute Pepsi for coke. This is called Substitution effect.
Price effect = Income effect + Substitution effect
(iii) Law of Diminishing Marginal Utility:
(a) This law states that when a consumer consumes more and more units of a commodity, every additional unit of a commodity gives lesser and lesser satisfaction and marginal utility decreases.
(b) The consumer consumes a commodity till marginal utility (benefit)he gets equals to the price (cost)they pay, i.e., where benefit = cost.
(c) For example, a thirsty man gets the maximum satisfaction (utility)from the first glass of water. Lesser utility from the 2nd glass of water, still lesser from the 3rd glass of water and so on. Clearly, if a consumer wants to buy more units of the commodity,he would like to do so at a lower price. Since, the utility derived from additional unit is lower.
(iv) Additional consumer:
(a) When price of a commodity falls, two effects are quite possible:
1. New consumers, that is, consumers that were not able to afford a commodity previously, starts demanding it at a lower price.
2. Old consumers of the commodity starts demanding more of the same commodity by spending the same amount of money.
(b) As the result of old and new buyers push up the demand for a commodity when price falls.

(i) A good is called 'inferior goods' when its demand falls with a rise in the income of a consumer and vice- versa.
(ii) For example, Jowar or Bajra for a poor person.
(iii) A good is inferior in a relative terms. It means, a good is inferior or normal is determined by the income level of a consumer.
(iv) When a consumer moves to higher income, he/she may consider some goods below their income status, and treats them as inferior.

(i) A good is called 'inferior goods' when its demand falls with a rise in the income of a consumer and vice- versa.
(ii) For example, Jowar or Bajra for a poor person.
(iii) A good is inferior in a relative terms. It means, a good is inferior or normal is determined by the income level of a consumer.
(iv) When a consumer moves to higher income, he/she may consider some goods below their income status, and treats them as inferior.

(i) We know that though an individual may not buy a second-hand scooter even if the price of scooter falls but there may be some individual that could not afford to buy even a second-hand scooter earlier and now with a fall in their price they can afford it now.
(ii) Therefore, the number of consumers of a second-hand scooter increases with a fall in their price leading to an increase in market demand at a lower price.
(iii) Thus the market demand curve for scooters will be a downward sloping.

(i) Yes, the same goods can be inferior for one and normal for another one.
(ii) Whether a good is inferior or normal is determined by the income level of a consumer.
(iii) A good is a normal good for the consumer having lower income, may become an inferior good for a consumer having higher income.
(iv) When a consumer moves to higher income, he/she may consider some goods below their income status, and treats them as inferior.

The inverse relationship between price of the commodity and quantity demanded for that commodity is because of the following reasons:
(i) Income effect:
(a) Quantity demanded of a commodity changes due to change in purchasing power (real income), caused by change in price of a commodity is called Income Effect.
(b) Any change in the price of a commodity affects the purchasing power or real income of the consumers although his money income remains the same.
(c) Whenpriceofa commodity rise more has to be spent on purchase of the same quantity of that commodity. Thus, rise in price of commodity leads to fall in real income, which will thereby reduce quantity demanded is known as Income effect.
(ii) Substitution effect:
(a) It refers to substitution of one commodity in place of another commodity when it becomes relatively cheaper.
(b) A rise in price of the commodity let coke, also means that price of its substitute, let Pepsi, has fallen in relation to that of coke, even though the price of Pepsi remains unchanged. So, people will buy more of Pepsi and less of coke when price of coke rises.
(c) In other words, consumers will substitute Pepsi for coke. This is called Substitution effect.
Price effect = Income effect + Substitution effect
(iii) Law of Diminishing Marginal Utility:
(a) This law states that when a consumer consumes more and more units of a commodity, every additional unit of a commodity gives lesser and lesser satisfaction and marginal utility decreases.
(b) The consumer consumes a commodity till marginal utility (benefit)he gets equals to the price (cost)they pay, i.e., where benefit = cost.
(c) For example, a thirsty man gets the maximum satisfaction (utility)from the first glass of water. Lesser utility from the 2nd glass of water, still lesser from the 3rd glass of water and so on. Clearly, if a consumer wants to buy more units of the commodity,he would like to do so at a lower price. Since, the utility derived from additional unit is lower.
(iv) Additional consumer:
(a) When price of a commodity falls, two effects are quite possible:
1. New consumers, that is, consumers that were not able to afford a commodity previously, starts demanding it at a lower price.
2. Old consumers of the commodity starts demanding more of the same commodity by spending the same amount of money.
(b) As the result of old and new buyers push up the demand for a commodity when price falls.

The conditions are:

(i) Price of substitute goods rises.
(ii) Price of complementary goods falls.
(iii) Income of a consumer rises in case of normal goods.
(iv) Income of a consumer falls in case of inferior goods.
(v) When the preferences are favourable.

(i) It states that price of the commodity and quantity demanded are inversely related to each other, when other factors remain constant. It means, quantity demanded of the commodity rises due to fall in price of the commodity and vice-versa.
(ii) Ceteris Paribus means:
(a) Price of Related commodity remains constant.
(b) Income of a consumer remains constant.
(c) Taste and preferences of a household remains constant.

(iii)The law of demand makes a qualitative statement only and not quantitative. It indicates the direction of change in the amount demanded and it does not indicate the magnitude of change.
(iv) Law of demand is one sided. It explains only the effect of change in price on the quantity demanded. It states nothing about the effect of change in quantity demanded on the price of the commodity.

(i) Goods x and y are complementary goods as with fall in price of x, demand for good y rises.
(ii) Goods x and y are substitute goods as with the fall in price of x, demand for good y also falls.

(i) Complementary goods are those which are useless in the absence of other goods and which are demanded jointly.

(ii) There would always exist an inverse relationship between price of complementary goods and demand for given commodity.
(iii) It means, with a rise in price of complementary goods, the demand for given commodity falls and vice-versa.
(iv) For example pen and refill, tea and sugar are complements to each other.