Economy, asked by Vasukanigiri5344, 1 year ago

How can we interpret the income elasticity of demand?

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Answered by KeshavGiri79
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Answer:

A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand. If income elasticity of demand of a commodity is less than 1, it is a necessity good. If the elasticity of demand is greater than 1 it is a luxury good or a superior good.

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