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
Nature of Expectations in Keynes' Theory : The above discussion on the nature of expectations in Keynes' theory may be summarised as follows: 1) In forming long-term expec

What is the difference between 'Capital' and 'Capital value'?   "The total amount of money or other resources owned or used to obtain future income or benefits." On the other h

prove that the utility approach and the indifference curve approach yield the same consumer equilibrium

Marginal utility   - It is the measure of the additional satisfaction obtained from consuming one additional unit of good. * Marginal Utility: An instance - The marginal u

if a commodity has limited demand , should economist say that we still have a scarcity ?

Problem: (a) Why is an error term added to a regression and explain its importance in the OLS procedure? (b) Suppose we have a linear equation with a constant term, one expl

the demand and supply functions for goods are given by demand:Pd=50-3Qds and supply:Ps=14=1.5Qs. where p is the price of a pair of jeans, Q is the number of pairs of jeans a) calc

In the case of a tax abolition on food staples, what are the short run and long run effects?

Can marginal cost be constant? If so, does this mean that marginal cost are equal to average variable cost?

what is microeconomics