Income elasticity of demand, Managerial Economics

Assignment Help:

Income elasticity of demand

The income elasticity of demand measures the degree of responsiveness of the quantity demanded of a product to changes in income.  Its co-efficient is as follows:

  EY  =   Percentage change in quantity demanded

             Percentage change in income

This we may write as:

EY  =  DQ/Q

           DY/Y

Which can be simplified as:

EY  =  DQ  ·   Y

     =  DY      Q

Where Y  =  Income


Related Discussions:- Income elasticity of demand

Demand forecasting, what is the importance of demand forecasting to manager...

what is the importance of demand forecasting to managers

Explain mark-up pricing, Q. Explain Mark-up pricing? In addition to usi...

Q. Explain Mark-up pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules

Money supply, examine the endogenous and exogenous determinants of money su...

examine the endogenous and exogenous determinants of money supply

Salvatore, manual problems solution of demand theory

manual problems solution of demand theory

Equilibrium in a two commodity market, Equilibrium in a two commodity marke...

Equilibrium in a two commodity market Let us consider a two-commodity market model in which the two commodities are related to each other.  Let us assume the functions for bot

Advertising budget, Analyse The Method By Which a Firm Can Allocate The Giv...

Analyse The Method By Which a Firm Can Allocate The Given Advertising Budget Between Different Media Of Advertisement

Free trade, free trade promotes a mutually profitable regional division of ...

free trade promotes a mutually profitable regional division of labour greatly enhances the potential real national product ofall nations and makes possible higher standards of livi

Sat scores, 100 schools are given exactly one million dollars each in grant...

100 schools are given exactly one million dollars each in grant money. They can spend the money on any or all of three programs: math tutoring (math), kickball lessons (kickball),

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