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
(a) Reasons of Urban Growth (b) Characteristics of Urban Growth (c) Economic Life of a Building (d) Zone of Transition (e) Location Theory (f) Patterns of Growth Theory (g) Growth

Answer the following questions based on the graph that represents J.R.'s demand for ribs per week at Judy's Rib Shack. a.  How high must the price of ribs be for Judy to supply

what is the value in 10 years of 1 million dollars if interes rates are 4%?

comprehensively discuss the market structure in the South African mobile telecommunication industry

Total cost curve (TC) is obtained by adding up vertically total fixed cost and total variable cost curves because the total cost is sum of total fixed cost and total variable cost

find the highest premium find the actuarialy fair premium

What is Economic Theory? An economic theory that can be considered an axiomatic approach comprise a set of assumptions and circumstances, an analytical framework and explanatio

The Acme Bakery in the seaside resort town of Malvino sells freshly baked bread to two categories of consumers: residents of the town and tourists. The weekly demand from touris

draw the supernormal curve

Maurice has the following utility function: U (X; Y ) = 20X + 80Y ?? X2 ?? 2Y 2 where X is his consumption of CDs, with a price of $1, and Y is his consumption of movie videos, wit