What is income elasticity of demand with example?

Income Elasticity of Demand (YED) is defined as the responsiveness of demand when a consumer’s income changes. For example, if a person experiences a 20% increase in income, the quantity demanded for a good increased by 20%, then the income elasticity of demand would be 20%/20% = 1. This would make it a normal good.Aug 29, 2019

All categories