1.2.5 Income Elasticity Of Demand Flashcards by Michael Richardson | Brainscape

Q

What is income elasticity of demand

A

It’s how a products demand responds to a change in income

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Q

What is the formula

A

YED=%change in QD/ % change in real income

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Q

What is an inferior good

A

A product which experiences a decrease in demand when income increases

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