Income elasticity of demand, Microeconomics

Income Elasticity of Demand is described below:

Income elasticity of demand is the percentage change in the quantity demanded/required with respect to the percentage change in income of consumer.

Income elasticity of demand can be illustrated by the formula given below:

 

Y?d = Percentage change in Quantity Demanded

Percentage change in Income

 

If a 2% increase in the consumer's incomes causes an 8% rise in the product's demand, then the income elasticity of demand for the product will become:

Y?d = 8% =4

     2%

 

 

Posted Date: 7/19/2012 3:58:45 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
Productivity:Generally, productivity measures efficiency or effectiveness of productive effort. Productivity can be measured in several different ways. Physical productivity measur

Problem 1: i) It has often been argued that a monopoly has both costs and benefits. Discuss. ii) Explain, using diagram the short and long equilibrium positions of a monopo

preperation methods of deuterium

Identify the four essential economic activities. The four main economic activities are: a)  resource maintenance, b)  production, c)  distribution, and d) consumpti

Protection of infant firms: Infant industries are those firms, which are young. The absence of economies of scale to them makes their unit cost of production higher than older

illustration for demand of big macs using indifference curve and budget line

The prevention of major swings in economic activity can be handled most easily by the

Q. Define Credit? Credit:Ability to purchase something without immediately paying for it - through a credit card or bank loan, a mortgage or any other forms of credit. Creation

Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this ec

Working Capital: A business requires a certain revolving fund of finance to pay for regular purchases of initial labour, raw materials and other inputs to production. Working capit