Engel's law

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Engel's law is an observation in economics stating that, with a given set of tastes and preferences, as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In other words, the income elasticity of demand of food is less than 1.

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.