Question

Income elasticity of demand and how it can be measured

Answer 1

Answer:

Income elasticity of demand shows the degree of responsiveness of quantity demanded of a good to a small change in income of consumers. The degree of responsiveness of quantity demanded to a change in income is measured by dividing the proportionate change in quantity demanded by the proportionate change in income.

Answer 2

Answer:

☑ In economics, income elasticity of demand measures the responsiveness of the quantity demanded for a good or service to a change in income. It is calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.