Income Elasticity
Income Elasticity of Demand: Is the degree of responsiveness of quantity demanded of a good to a small change in the income of the consumer.
Income elasticity can be represented as-
YED = proportional change in the quantity demanded/proportional change in the income
If the proportion of income spent on a good remains the same as income increases, then income elasticity for the good is equal to one.
If the proportion spent on a good increases, then the income elasticity for the good is greater than one.
If the proportion decreases as income rises, then income elasticity for the good is less than one.
Subscribe to:
Post Comments (Atom)
3 comments:
I liked your blog very much it is very interesting and I learned many things from this blog which is helping me a lot. I definitely bookmarked to check out new stuff your post.
Microeconomics Homework Help
Laptops on lowest price in PakistanLaptop Guide and who has an unmistakable fascination for everything workstation. Notwithstanding all these extravagant new enhancements, gadgets also,
Post a Comment