Engel curve

Engel curve

In economics, an Engel curve shows how the quantity demanded of a good or service changes as the consumer's income level changes. It is named after the 19th century German statistician Ernst Engel.

Graphically, the Engel curve is represented in the first-quadrant of the cartesian coordinate system. Income is shown on the Y-axis and the quantity demanded for the selected good or service is shown on the X-axis.

For normal goods, the Engel curve has a positive slope. That is, as income increases, the quantity demanded increases. For inferior goods, the Engel curve has a negative slope. That means that as the consumer has more income, they will stop buying the inferior goods because they are able to purchase better goods. For goods with Marshallian demand function generated by a utility in Gorman polar form, the Engel curve has a constant slope.


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