Abstract: Demand-induced innovation emphasizes that the income gap plays a role in product innovation throu-gh demand structure. This paper develops a general equilibrium of consumer goods innovation，which not only fully investigates the demand-induced innovation mechanism，but also expands the demand-induced innovation theory from the income growth rate and income uncertainty. The model shows that first，demand-induced inno-vation depends on the trade-off betweenmprice effect and market size effect，then exists an inverted U-shaped  relationship between income gap and product innovation. Second，high income growth rates have a positive in-centive for product innovation due to the expected increase in market size. Third，income uncertainty has an in-hibitory effect on technology innovation through increasing precautionary savings. Based on the empirical anal-ysis of 21 major industries in the manufacturing industry from 2008 to 2020，the corresponding conclusions of the theoretical model are supported.

Keywords: individual income distribution; demand-induced innovation; price effect; market size effect; general equilibrium of consumer goods innovation