On Relations Between Demand Prices And Total Income(Outcome)In Accordance With The Characterictics Of Price Elasticity

Under thenon-linear condition, when the demand curve can be expressed approximately with function Qd=kP -E and when, price P fetching value in((0,e 1/E ), the size of demand elasticity Ed determines whether the demand curve is precipitous or smooth. At this moment, goods whose Ed is more than 1, rich in elasticity (luxuary goods) its curve is relatively smoother, and those goods(necessities) whose Ed is less than 1, deficient in elasticity, its curve is relatively precipitous. The of former price and total income chage in reverse directions change, namely the price rises, the total income reduces, the price drops, the total income increases. The latter's situation is just the opposite. Under the linear condition, only when two demands curves are crossing (but can't be crossing in the axis of ordinates),the size of demand elasticity Ed determines whether the demand curve is precipitous or smooth, The bigger Ed is, the smouter is the demand curve is relatively smooth, the smaller Ed is, the demand curve is. But the relation between the price and total income should be analyzed in different situation.