Importance of income elasticity, Managerial Economics

Assignment Help:

Importance of Income Elasticity

If a country is experiencing economic growth, the income of the people will increase.  However, for those engaged in the production of goods with negative income elasticities, this will mean a declining demand for their product.  Even products with positive income elasticities, there is a great variability of response.

Income elasticity therefore has a most important effect upon resource allocation.  As such, prosperous areas of any economy are often those associated with products which have a high income elasticity.  In recession the opposite will be true.


Related Discussions:- Importance of income elasticity

Explain about transaction cost theory, Q. Explain about Transaction Cost Th...

Q. Explain about Transaction Cost Theory? The below model reveals market and institutions as a possible form of organisation to coordinate economic transactions. When external

Nature of demand curves and elasticity, Usually, elasticity of a demand cur...

Usually, elasticity of a demand curve throughout its length isn't the same (Fig. below). It varies between 0 and ∞, or in other words, 0 ≤ e p ≥ ∞ In some cases, though, the

Write internal and external factors of business operation, Internal and Ex...

Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m

Objectives of icas, Objectives of ICAs Most schemes have as their main...

Objectives of ICAs Most schemes have as their main objective to stabilize and/or increase the world price of commodity, producers' incomes, foreign exchange earnings of export

Oligopoly, Classification of oligipoly

Classification of oligipoly

Exceptional supply curves, Exceptional supply curves In have some situ...

Exceptional supply curves In have some situations the slope of the supply curve may be reversed.   i)   Regressive Supply.   In this case, the higher the price within a ce

#Principles and Practicices of Management, How will you influence people to...

How will you influence people to strive willingly for group objective in your organization (target based industry)? Apply your interpersonal influence through communication process

Perfectly inelastic (zero elastic) supply, Perfectly Inelastic (Zero Elasti...

Perfectly Inelastic (Zero Elastic) Supply Supply is said to be perfectly inelastic if the quantity supplied is constant at all prices.  The supply curve is a vertical straight

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd