What are the determinants of income elasticity of demand, Microeconomics

Assignment Help:

What are the determinants of income elasticity of demand? 

There are three determinants of income elasticity of demand. These are: Degree of necessity of a good: In a developed economy, as income enhances the demand for luxuries enhances a lot while the demand for necessity enhances a little bit because people cannot consume a lot of basic goods. So the items such as cars have very high income elasticity of demand while items such as potato have low elasticity of demand. Also inferior good have a negative income elasticity of demand.

 


Related Discussions:- What are the determinants of income elasticity of demand

Free trade, is country beter off with ban on imports?

is country beter off with ban on imports?

Base case NPV analysis , How base case NPV analysis is applied in financial...

How base case NPV analysis is applied in financial risk management

Limitations of Valence Bond Theory, Valence Bond Theory Explains, but does ...

Valence Bond Theory Explains, but does not predict the shape. Valence Bond Theory Cannot explain colour and spectra. Valence Bond Theory Qualitative explanations; does not expl

Define contribution pensions, Q. Define Contribution Pensions? Defined ...

Q. Define Contribution Pensions? Defined Contribution Pensions: A pension plan which makes no specified promise about level of pension paid out after retirement. In its place,

Describe about capitalism, Q. Describe about Capitalism? Capitalism: An...

Q. Describe about Capitalism? Capitalism: An economic system in that privately-owned businesses and companies undertake most economic activity (with the goal of generating priv

Private returns versus social returns, Private Returns Versus Social Return...

Private Returns Versus Social Returns As there is subsidisation of education by the state in all countries (and a little higher subsidisation in developing countries) it happe

Price mechanism, use of diagram how the price mechanism operates to allocat...

use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.

Economics 6th edition, What is the theory of absolute and comparative adva...

What is the theory of absolute and comparative advantage?

Rubenstein''s model in Game theory, What is Rubenstein''s model in Game the...

What is Rubenstein''s model in Game theory? A Rubinstein bargaining model is mainly refers to class of bargaining games which is main feature of alternating offers through an infi

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