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International Conference on Computer Technology and Development, 3rd (ICCTD 2011)

Jianhong Zhou
Jianhong Zhou
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After elimination of subsidy the final market price of all goods and services go up so, we investigate the Marshalian demand functions of food and it's items, clothes , health related items,households related items ,transportation and housing after increasing prices of them according to maximize the utility function under assumptions. Due to investigation of changing in prices on demand functions isolate income effect and substitution of demand by employing Slutesky and Hecksian methods. Normal, Necessary and Luxury goods has been divided under elasticity of goods that is revealed FO, H, CL, HT are Inelastic and Necessary goods so, FU(furnishing ) include to elastic and luxury goods. The substitution and income effects reinforce each other when a normal good's own price changes. The 1œLaw1 of Downward-Sloping Demand always applies to normal goods because substitution and income effects reinforce each other.

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