# data[].attributes.body
The price increases, consume less / The price decreases, consume more

normally slope down

-  demand curve slopes downward  to focus on opportunity costs.
-  low price of goods makes it attractive to buy more.
-  high price of goods makes it less attractive and the consumer buys fewer.

The substitution effect is defined as the change in the quantity demanded as a relatively cheaper good is substituted for a comparably more expensive good.

# data[].attributes.body
The midpoint method replaces the usual definition of the percent change in a variable, X, with a slightly different definition

change in X = (change in X / Average value of X) x 100

Average value of X = (Starting value of X + Final value of X) / 2

Price elasticity of demand = (%change in quantity demanded / %change in price)

Price elasticity of demand = { (Q2 - Q1 / (Q1 + Q2) / 2) / (P2 - P1 / (P1 + P2) / 2) }

# data[].attributes.body
The price elasticity of demand compares the percent change in quantity demanded to the percent change in price as we move along the demand curve.

calculate the percent change in the quantity demanded  → the corresponding percent change in the price as we move along the demand curve.

change in quantity demanded = (Change in quantity demanded / Initial quantity demanded) x 100

change in price = (Change in price / Initial price) x 100

price elasticity of demand (% change in quantity demanded / %change in price)

# data[].attributes.body
When income is adjusted to reflect its true purchasing power, it called real income, in contrast to money income  or nominal income, which has not been adjusted

When the price of a good changes, the income effect is the change in the quantity required as a result of a change in the overall purchasing power of the consumer's income.

Two things about the distinction between these two effects

1. majority of goods and services                                            - income effect is not important on individual consumption. → market demand curves slope downward due to the substitution effect.

2. the income effect usually reinforces the substitution effect.                                               - reduction in income leads to a reduction in the quantity demanded and reinforces the substitution effect.

In an inferior good, the income and substitution effects work in opposite directions. A price increase increases the quantity demanded, while a substitution effect decreases the quantity demanded.

Giffen goods are rare - The quantity sought will decline when prices rise because, in general, it is believed that the income effect for an inferior good is smaller than the substitution effect.