YED

Question 1

Income elasticity of demand

Answer 1

A measure of the responsiveness of demand to changes in income

Question 2

How to calculate YED

Answer 2

YED= percentage change in quantity demanded/percentage change in income

Question 3

For what is YED <0

Answer 3

Inferior good

Question 4

For what is YED > 0

Answer 4

Normal goods

Question 5

For what is YED > 1

Answer 5

Luxuries (income elastic)

Question 6

When 0 < YED < 1

Answer 6

Necessities (income Inelastic)

Question 7

Why fo we need to know YED

Answer 7

Understanding consumer income can help manager to know how it
influences demand for a good and the position of the demand curve