Reverse Income Demand Curve for a Luxury Good    To the right is the graph of a luxury good when income (I) is shown on the horizontal axis and quantity (Q) is shown on the vertical axis.

   A nice aspect of this set up is that as income rises and consumption rises at an increasing rate the curve becomes more vertical. Again, this approach has the advantage of having a more intuitive look. Though the other approach, with income on the vertical axis and quantity on the horizontal axis, has the advantage of keeping quantity where we're used to seeing it on ordinary demand curves.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved