Question

Find below the data for price elasticity and income elasticity of demand for 5 different
commodities. Interpret the values in the table in the light of
 Whether the demand is elastic or inelastic for each of the commodities and why
 What do you mean by negative income elastic demand in case of commodity 3
 Give example for each type of commodity.
Commodity Price Elasticity of
demand
Income elasticity
of demand
1 -0.3 +0.6
2 -1.45 +5.60
3 -5.09 -1.67
4 -0.7 +0.8
5 1.0 +1.0

Answer 1

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