Question

Discuss the concept of Income demand.​

Answer 1

Answer:

Income elasticity of demand refers to the sensitivity of the quantity demanded for a certain good to a change in real income of consumers who buy this good, keeping all other things constant. ... With income elasticity of demand, you can tell if a particular good represents a necessity or a luxury.

Explanation:

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Answer 2

Income elasticity of demand refers to the sensitivity of the quantity demanded for a certain good to a change in real income of consumers who buy this good,keeping all other things constant.The formula for calculating income elasticity of demand, you can tell if a particular good represents a necessity or a luxury.Income elasticity of demand measures the responsiveness of demand for a particular good to changes in consumer income.The higher the income elasticity of demand in absolute terms for a particular good,the bigger consumers ' response in their purchasing habits-if their real income changes.Buisiness typically evaluate income elasticity of demand for their products to help predict the impact of a business cycle on product sales.