The amount of goods produced depends upon the number of resources available for use. This is known as supply and demand, always must attempt to reach equilibrium between the two, which will directly impact the price of the products produced. If something is heavily demanded and at the same time, its resources are limited, the price of the product will rise. The idea of course works both ways.
Demand is the quantity of a commodity that will be required at any given price over some period of time. For the majority of the goods and services, experience shows that the quantity demanded would increase as the price falls along the demand curve. A demand curve is a graphic that represents the values of demand called a demand schedule. A good that is in greater demand, do to income increases is known as a normal good. An inferior good is a good that is in less demand even though the income increases, when this situation occurs the demand curve is positive sloping. Using the demand curve, we can give a sample of a graph of the demand schedule; for the quantity of toilet paper demanded. In this graph we can determine how many rolls of toilet paper will be purchased and at what price. As one variable gets larger the other will become smaller, if price drops there is more demand of product, it is a negatively sloping. The demand is based on human behavior, is logical to say that people will buy more of a product if price is cheaper.
In reality, if the price of a good raises the income of the consumer will decrease. People won't be able to buy the same goods as before because it won't fit their budget, do to the increase in costs. Most of the time people would have to decide between their wants and their needs before buying a good. The income effect can be defined as if the price of a good falls, the expected outcome would be that consumers would buy more because they have the money and can afford to buy more.