consumer Buying Behavior

Consumer buying behavior with respect to elasticity of income: 

Elasticity of income is the percent change in quantity demand with percent change in income of the customer and it has a major role to know the buying behavior of customer. 

Generally if the income of a person increases then the purchasing power of the customer also increases. 

Impact: this situation is not similar in all the cases.

Example: in increase of income , demand of general commodities will also increase. 

In case of decrease of income the quantity demand of general commodities will also decrease. 

Example: daily use commodities.

If price of some product increases but it doesn’t affect the quantity of that particular product.

Example: medicine.

But it has also negative impact. 

If income of customer will increase then there are few products which demand will decrease.

Reason:

After increase in the income, life style of people also change and they tend to buy comparatively costlier product and high value product. So demand of certain product decreases.

Example: when income is less , people will prefer chicken.  When income increases, people will go for mutton in place of chicken even if the price of chicken decreases.