Question

If the income of the consumers has increased from 6000 to 7500 in the

economy and quantity increased from 60 kg to 68 kg; how does it affect the

demand for wheat in the economy? Calculate income elasticity.​

Answer 1

Answer:

Income elasticity of demand is an economic measure of how responsive the quantity demand for a good or service is to a change in income.

The formula for calculating income elasticity of demand is the percent change in quantity demanded divided by the percent change in income.

Businesses use the measure to help predict the impact of a business cycle on sales