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

Manaerial economics, define scarcityand oppurtunity cost.show how these con...

define scarcityand oppurtunity cost.show how these concepts are useful in managerial decision making

The law of diminishing returns (law of variable proportions), THE LAW OF DI...

THE LAW OF DIMINISHING RETURNS  (LAW OF VARIABLE PROPORTIONS) One of the most important and fundamental principles involved in economics called the law of diminishing return

Environmental issues of managerial economics, Environmental issues of Manag...

Environmental issues of Managerial economics Managerial economics also includes some aspects of macroeconomics. These relate to political and social environment in that anin

Demand and supply, The demand for good X is estimated to be:  where p x p...

The demand for good X is estimated to be:  where p x price of X in dollars M = personal disposable income in trillions of dollars per year P y = price of a competitive in do

Factors influencing exchange rates, Factors influencing Exchange Rates ...

Factors influencing Exchange Rates i.  Inflation:   Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil

Define national income, National Income National Income is a measure o...

National Income National Income is a measure of the money value of goods and services becoming available to a nation from economic activities. It can also be defined as the to

Oligopoly , why firms under oligopoly market should follow price rigidity...

why firms under oligopoly market should follow price rigidity?

Theories of the firm, Define Williamson''s Model of Managerial Discretion p...

Define Williamson''s Model of Managerial Discretion practice?

Measures to control inflation, Measures to control inflation An inflat...

Measures to control inflation An inflationary situation can effectively be addressed/tackled if the cause is first and foremost identified.   Governments have basically three

Indifference curve analysis, Indifference Curve Analysis In the 1930s ...

Indifference Curve Analysis In the 1930s a group of economists, including Sir John Hicks and sir Roy Allen, came to believe that cardinal measurement of utility was not necess

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