Concept of consumption functions

Any individual to fulfill the needs different goods are consumption if income increase, the consumption also increase and if income decrease, the consumption also decrease. There is a close relationship between consumption and income. Consumption depicts the expenditure at different level of income. The more changes in income results in the more changes in the consumption expenditure. Therefore, consumption function gives the schedule of consumption expenditure at various levels of income of the people. Thus, consumption function is also termed as propensity to consume. The table that shows the consumption expenditure schedule at various level of national income is known as consumption schedule. This shows the propensity to consume of the people. For this reason, consumption function is also known as the propensity to consume. Since every individual consume on the basis of the income, the income is independent variable and the consumption is dependent variable. This is because consumption is dependent upon the income. For this reason, consumption increase as income increase and consumption decrease as income decrease. Therefore, consumption is the function of income