Income Elasticity of Demand:

Income elasticity of demand is the responsiveness of demand for a commodity to a change in consumer income.

Measurement of Income Elasticity of Demand

Income electricity of demand (YED) is measured as percentage change in demand divided by percentage change in income.

D = the original demand

I = the original income

ΔD = change in demand

= New demand minus the original demand

ΔI = change in income

= New income minus the original income