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edu.subha.peperonity.net

. consumption curves:

What are income consumption curves and how does it differ from Price
Consumption Curves?

PCC and ICC are entirely different concepts in Economics, however they
are inter-related. They meet at a common point called " DEMAND FOR
THE PRODUCT"

ICC ( Income Consumption Curves) are curves which determine the
consumption of a consumer based on his/ her income.
When Income is High, Spending Capacity increases, higher the
spending capacity - more the demand. Thus converse to the original
demand theory which says, PRICE determines Demand, ICC theory
says, INCOME of a PERSON determines the Demand for a Product.

PCC ( Price Consumption Curve) goes by the orginal demand theory
where the relation between price of a product and demand for a
product is stated. When price is high demand falls and vice versa.

When Both PCC and ICC are taken together, the actual Demand
for a product gets better determined.
Recollect the Exceptions to demand theory which says, Income
Change will affect demand.

Therefore, though theorotically we study PCC and ICC as different
concepts, in practice for application purpose, both need to be used
together to determine the demand for a Product.


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