Income elasticity of demand, Microeconomics

Assignment Help:

Income Elasticity of Demand is described below:

Income elasticity of demand is the percentage change in the quantity demanded/required with respect to the percentage change in income of consumer.

Income elasticity of demand can be illustrated by the formula given below:

 

Y?d = Percentage change in Quantity Demanded

Percentage change in Income

 

If a 2% increase in the consumer's incomes causes an 8% rise in the product's demand, then the income elasticity of demand for the product will become:

Y?d = 8% =4

     2%

 

 


Related Discussions:- Income elasticity of demand

Demand, factors influencing the conditions of demand for a given product

factors influencing the conditions of demand for a given product

Floating exchange rates, Floating exchange rates There are two basic s...

Floating exchange rates There are two basic systems that can be used to determine the exchange rate between one country's currency and another's: a floating exchange rates (al

Comparison with our targets - structure of national income, Comparison wit...

Comparison with Our Targets : A proper objective assessment of our performance can be carried out only when we juxtapose our current achievements with: (i) planned or targeted

Wealth, Wealth: This is a stock of accumulated purchasing power stored up...

Wealth: This is a stock of accumulated purchasing power stored up from the past. For example, if you have a fat savings account accumulated from your past earnings, your curre

Cost curves, If the average variable cost curve is horizontal, what is the ...

If the average variable cost curve is horizontal, what is the shape of the short-run marginal cost curve? What shape would the short-run average cost curve be?

Replacement demand, The total demand consists of: 1. New owner demand an...

The total demand consists of: 1. New owner demand and 2.A replacement demand The replacement demand tends to grow with the in the total stock with the consumers. Once a pe

What is the difference between gdp and gnp, What is the difference between ...

What is the difference between GDP and GNP?  Gross domestic product (GDP) is the value of the total final output formed inside a country, during a given year. GDP, like all mea

Decreasing marginal returns and negative marginal returns, What is the diff...

What is the difference between decreasing marginal returns and negative marginal returns?

Changes in market equilibrium, Changes in Market Equilibrium Equilibriu...

Changes in Market Equilibrium Equilibrium prices are known by the associate level of supply and demand. Supply and demand are decided by particular values of supply & demand

Determinants of social demand for education, Determinants of Social Demand ...

Determinants of Social Demand for Education Certain levels of education like the secondary school and graduate level are considered as having productive value and are attribut

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