Question

Discuss the concept of income demand...Essay Question Answer✅ Correctly❌ Wrong answer will be reported...​

Answer 1

Answer:

There are generally three types of elasticity of demand, which are price, cross-price and income elasticity of demand. These three will be explained individually in order in the following paragraphs.

Price elasticity of demand is a measure of the responsiveness of change in quantity demanded of a good/service to a change in price, ceteris paribus. As the law of demand indicates, when the price of a good/service

Answer 2

Answer:

Income elasticity ofdemand 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 incomeelasticity of demand, you can tell if a particular good represents a necessity or a luxury.