Income Increase In Friendswood

The Cash Flows

Normal Goods

Overall income in Friendswood increases. The people who live in the city have more money. Therefore, if people have more money then they will buy more cookies. If income increases so does demand.

Income Increases Demand Falls

Inferior Goods

If the people of Friendswood begin to make more money, the demand for cookies will fall. This is because the people will be able to afford other more high end treats. When the people of Friendswood buy these high end treats they will buy less cookies and the demand for cookies will go down.