Income elasticity of demand quantifies how the quantity demanded of a good responds to changes in consumer income. It is calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.
Classification of Goods:
Understanding income elasticity helps businesses forecast demand under varying economic scenarios and aids governments in assessing how fiscal policies, like tax adjustments, might affect consumer expenditure.
From Chapter 2:
Now Playing
Demand and its Elasticities
100 Views
Demand and its Elasticities
438 Views
Demand and its Elasticities
445 Views
Demand and its Elasticities
199 Views
Demand and its Elasticities
128 Views
Demand and its Elasticities
126 Views
Demand and its Elasticities
205 Views
Demand and its Elasticities
197 Views
Demand and its Elasticities
94 Views
Demand and its Elasticities
53 Views
Demand and its Elasticities
98 Views
Demand and its Elasticities
58 Views
Demand and its Elasticities
85 Views
Demand and its Elasticities
286 Views
Demand and its Elasticities
71 Views
See More
Copyright © 2025 MyJoVE Corporation. All rights reserved