Hence the market demand curve will always slope downward to the right.

The Marshallian demand curve also shows the different amounts of a good demanded by the consumer at various prices, other things remaining the same.

It arrives at the same results without making the dubious assumptions of measurability of utility and constant marginal utility of money.

PQ, PQ 1 and PQ 2 are the budget lines of the consumer on which R, S and T are the equilibrium positions forming the PCC curve.

If the total money income of the consumer is divided by the number of goods to be bought with it, we get per unit price of the good.

When the price of good X as determined by the budget line PQ, is OPOQ 1 (Rs 2), the price- consumption curve shows that he buys OB (4 units) of X.

Point R, S and T on the PCC curve show price-quantity relationships for good X.

To draw the demand curve from the PCC, draw a perpendicular on the lower figure from point R in the upper portion of Figure 12.22 which should pass through point A.

Then draw a line for point P 1 (5) on the price axis (lower figure) which should cut the perpendicular at point F.

This curve shows the amount of X demanded by the consumer at various prices.

With the fall in the price of X the consumer buys more units of it and the demand curve D slopes downward to the right.

X being a Giffen good when its price falls, the real income of the consumer increases.

As a result, he spends his income on superior goods and buys less quantity of the Giffen good X.

The demand curve for a Giffen good has been drawn from the PCC in Figure 12.23.

The consumer is in equilibrium at point R on the budget line PQ 1.

When we join these points the demand curve DD 1 is formed which slopes upward to the right showing a direct relationship between price and quantity demanded.

Since X is a Giffen good, as its price falls to P 1, the consumer buys less than before.

Thus the positively sloping demand curve OD, for the Giffen good X shows that with the fall in its price, quantity demanded decreases, and vice versa.

Thus in Figure 12.24 (A) the demand for good X at the price OP 1 is Q A on the part of consumer A.

These quantities Q A QB Q C are added sideways in Panel (D), where the slope of the demand curves of all the individuals and hence for the market is the same.

It will not, however, slope to the left even if the good happens to be inferior for some individuals.

There will be other consumers demanding it at a lower price to whom it may not appear an inferior good.

For the market as a whole, a good is not likely to be inferior at all, there being always a sufficient number of buyers over the same price range.

Price Consumption Curve