explain the chain effects of increase in income of buyers of a commodity on its demand
The extent to which the demand for a commodity is influenced by the increase in income depends upon the nature of the good, that is, whether the good is a normal good or an inferior good.
(i) Normal Good
If the good is a normal good, then with increase in income, the demand for good increases.
Income ↑ ⇒ Demand ↑
(ii) Inferior Good
If the good is an inferior good, then with increase in income the consumer’s demand falls for such goods.
Income ↑ ⇒ Demand ↓