Consumer Income:

A change in consumer income may bring about a change in the demand for a good or service. However, the direction of change in demand will depend on the type of commodity in question.

i. For a normal good, demand might increase when consumer income increases and demand might fall as consumer income falls, ceteris paribus.

ii. For an inferior good, demand might decrease when consumer income increases while demand might fall as consumer income increases, ceteris paribus. Therefore, inferior goods are those goods that we consume more when we are worse of financially and less when we are better of. For instance, who would want to buy "second hand" goods when he becomes richer?

iii. For a necessity, a change in consumer income may not affect demand.