1.2.5 YED Flashcards
1
Q
What is the YED formula?
A
% change in quantity demanded / % change in income
2
Q
What does YED manage?
A
YED measures the responsiveness of demand to a change in income.
3
Q
% change in quantity demanded =
A
Price new - Price old / Price old x 100
4
Q
Normal goods and have a YED value between
A
0-1 (Positive)
5
Q
Luxury goods have a YED value
A
> 1 (positive)
6
Q
Inferior goods have a YED value of
A
<0 (negative)
7
Q
How can YED be used?
A
YED is used by business to help them decide what products and services they should offer in order to increase sales.
