Income Inelastic Goods - 33

For other products, we note that as income rises, the quantity demanded also increases, but the increase in quantity demanded increases at a slower rate than the increase in income. Products of this type are income inelastic. The slope of the curve increases, but the rate of increase actually falls. (The curve looks like it will reach some kind of ''maximum'' as income rises).

Products with inelastic income demand include food (but see below) and items like magazines.

If you produce goods or services which are income inelastic, you will sell more as people's incomes rise, but the rate of growth of your profitability will eventually fall.