YED Flashcards
1
Q
what does a YED coefficient of 1+ mean
A
the product is income elastic, this means demand will rise when incomes rise and vise versa e.g. luxury goods
2
Q
what does a YED coefficient of 0.1~0.9 mean
A
the product is income inelastic, this means demand isn’t that responsive to income changes e.g. necessities
3
Q
what does a YED coefficient of less than 0 mean
A
the means demand rises when incomes fall e.g. unbranded food
