Income elasticity of demand, Managerial Economics

Income elasticity of demand

The income elasticity of demand measures the degree of responsiveness of the quantity demanded of a product to changes in income.  Its co-efficient is as follows:

  EY  =   Percentage change in quantity demanded

             Percentage change in income

This we may write as:

EY  =  DQ/Q

           DY/Y

Which can be simplified as:

EY  =  DQ  ·   Y

     =  DY      Q

Where Y  =  Income

Posted Date: 11/27/2012 6:37:24 AM | Location : United States







Related Discussions:- Income elasticity of demand, Assignment Help, Ask Question on Income elasticity of demand, Get Answer, Expert's Help, Income elasticity of demand Discussions

Write discussion on Income elasticity of demand
Your posts are moderated
Related Questions
Determine the Market demand curve Market demand curve is the horizontal summation of individual demand curves. The individual demand schedules plotted graphically and summed up

classification of costs

a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast

How economics contributes to managerial functions However economics is variously defined, it's basically the study of logic andtechniques and tools, to make optimum use of ava

Q. Explain the Shut down point? ShutdownPoint: With MR = MC, firm attains equilibrium at point E where it produces OM amount of the output. To produce this output, firm incur

in the context of an environment of business,state briefly the implication of (1) Ee>1.....(2)Ee=1......(3)Ee=0.......(4)Ee

Environmental issues factors This is governed by the below factors:  The type of economic system of the country Business cycles Industrial policy of the countr

1. Explain the industry and describe the general pattern of change of the particular market model. 2. Hypothesize the basic short-run and long-run behaviours of the model in the

THE MONETARY ACCOUNT Also called official financing, this comprises the financial transactions of the government (handled by the central bank) needed to offset any net outflow

Indian industry has progressed a lot because of globalization. A lot of development has been seen in Indian industry.