Computation of income elasticity

Reference no: EM1313032

Calculate the income elasticity of demand for the product below, using average values for incomes and quantities.

Quantity of video tape recorders per year	Per capita annual group income
1000	$15000
2000	20000

a. Is the demand for this product income elastic or inelastic?

b. Would you consider this commodity a luxury or a necessity?

Reference no: EM1313032

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