When demand for a product goes from 100 to 200 and income goes up from $40,000 to $45,000 what is the income elasticity of demand?
Added by Jenna G.
Step 1
Income elasticity of demand measures how much the quantity demanded of a good responds to a change in consumers' income. It is calculated using the formula: \[ \text{Income Elasticity of Demand} = \frac{\% \text{ Change in Quantity Demanded}}{\% \text{ Change in Show more…
Show all steps
Your feedback will help us improve your experience
Andrew Davis and 78 other Macroeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
4. When income goes from $15,000 to $25,000 quantity demanded goes from 10,000 to 8,000. Using the mid-point formula what is the income elasticity of demand and what type of good is it?
Azat N.
Given $Q=100-2 P+0.02 Y$, where $Q$ is quantity demanded, $P$ is price, and $Y$ is income, and given $P=20$ and $Y=5,000$, find the (a) Price elasticity of demand. (b) Income elasticity of demand.
Comparative-Static Analysis of General-Function Models
Differentials
What is the price elasticity of demand?
Abdul K.
Recommended Textbooks
Principles of Economics
Macroeconomics
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD