Skip to Content

Analysis 1: Calculating And Interpreting Elasticity

Analysis 1: Calculating And Interpreting Elasticity

Submitted by • May 6, 2013 customwritingtips.com

Part II, a). Income elasticity of demand

Income elasticity of demand = percentage change in quantity demanded / percentage change in income

= [(2-10)/ (10) ÷ (30,000-20,000)/ (20,000)]

= {(-8/10) ×100] ÷ [(10,000/20,000) ×100]} = -80% ÷ 50% = -1.6

Voted by:
Voted by maryvanzy

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>