 module 20, change in equilibrium due to factors other than price. Earlier we will make a discussion about change in equilibrium because of change in price of one commodity. If in last module we make discussion about the impact of change in price of apples on the consumers equilibrium. But consumers equilibrium will also change if there is change in factors other than price. These other factors to main other factors that can contribute towards change in equilibrium is change in consumers disposable income and change in price of related goods. Besides change in price of apples if there is change in income of the consumer it also leads towards change in equilibrium. Similarly if there is change in price of related goods it also results in change in equilibrium. When we make discussion about change in income, impact of income on equilibrium depends upon the nature of goods. And in economics we usually categorize goods under these subheadings of normal goods and inferior goods. When we say a commodity under consideration is a normal good these are the goods for which a rise in income leads to increase in consumption of that particular commodity. For example if we assume rise is a normal commodity then if income of household increases then consumption of rise will increase. If we assume mutton is a normal commodity mutton is a normal good if income of household increases then consumption of mutton will also increase because of increase in income of the household. But there are certain commodities in real life that have some negative association between income and their consumption. If income increases it might be possible there is decrease in consumption of that particular commodity. For example if we assume wheat and potato are inferior goods. If wheat and potato are inferior goods then because of increase in income consumption of wheat will decrease. Similarly if potato is an inferior good if income of household increases then consumption of potato will decrease. To elaborate the impact of income on consumers choice again we are using budget line and indifference curve. In this diagram suppose BL1 is the original budget line. This is the budget line where income of the consumer is equal to 200 rupees. Along BL1 budget line consumer is maximizing his satisfaction along IC1 indifference curve. And along IC1 indifference curve he will choose combination B to maximize his satisfaction. Now if we assume keeping other things constant there is income of household becomes double because of that increase in income of the consumer budget line will shift outward. From BL1 it will shift to BL2. Along BL2 budget line consumer can maximize his satisfaction along IC2 indifference curve. Along IC2 indifference curve he will choose combination C to maximize his satisfaction. And similarly if we assume with reference to original budget line that we are depicting with BL1 the income of household decreases because of that decrease in budget income of the household budget line will shift from BL1 to BL0. Along BL0 budget line consumer is maximizing his satisfaction along IC1 indifference curve. And along IC1 indifference curve he is choosing combination A of apples and oranges to maximize his satisfaction. So keeping other things constant if there is change in income of the household there is change in combinations of apples and oranges that are being used by a particular consumer. From this particular association if income of the consumer increases from BL0 to BL1 suppose if income of the household increases and we consider BL0 is the original budget line and BL1 is the budget line when income of the household increased then we can see there is simultaneous increase in the consumption of apples and oranges. That when there is further increase in income that we are reporting with BL2 that is movement from BL1 to BL2. We can see here that quantity of apples that are being used by that particular consumer has an increase but when you look at oranges then what is happening is in fact there is decrease in consumption of oranges. So in this framework we can see if income of household increases that we are reporting with budget line BL1 to the income level BL2 we can consider apple as a normal quantity while in this case we can say for that particular consumer oranges is a inferior commodity. Because of increase in income consumer decrease the consumption of oranges and to show this association between quantity demand and income we use the concept of angel curve. Angel curve shows different combinations of quantity demand and income. If commodity under consideration is a normal commodity then there is a positive association between quantity demand and income of the household. In this diagram with reference to apples we can say apples is a normal commodity. If there is increase in apple there is increase in income there is increase in quantity demand for apples but when we make discussion with reference to oranges we can observe up to income level 10 oranges act as a normal commodity. There is increase in quantity demand for oranges because of increase in income but after income level of 10 if there is further increase in income if income moves from 10 to 20 we can observe there is a decrease in quantity demand for oranges. So we can say oranges is an inferior commodity if income of the household lies increases from 10 to 20. So when we say a commodity is an inferior commodity it indicates because of increase in income there is decrease in quantity demand for that particular commodity. Other things being constant that demand curve will shift rightward when income rises for a normal good. For example if we consider mutton is a normal good for a particular consumer then demand curve will shift rightward because of increase in income of the consumer. In fact in this diagram we are showing relationship between price and quantity demand. We are taking price on vertical axis and quantity demand on horizontal axis. Because of increase in income if our demand curve shifts rightward if our demand curve shifts upward it indicates commodity under consideration is a normal commodity. In case of mutton because of increase in income there is increase in demand for mutton. But when we make this discussion with reference to chicken it might be possible for that particular consumer chicken is an inferior good. Keeping other things constant if there is increase in income and because of that increase in income demand curve of the consumer shifts downward. Demand curve of the consumer shifts leftward then it indicates commodity under consideration is an inferior good. Hopefully in this module you are very much clear about the nature of goods that are being used by a particular consumer. And we categorize goods under the category of normal and inferior good on the basis of its association between quantity demand and income. If there is positive association between quantity demand and income commodity under consideration is a normal good. But if there is a negative association between quantity demand and income then it indicates commodity under consideration is an inferior good. Thank you very much.