Can you explain income elasticity of demand?

Income elasticity of demand (YED) is the relationship between a change in quantity demanded for a good and the change in real income. some goods are normal and some inferior. Normal means a rise in income results in rise demand (positive income elasticity of demand value) i.e car, Rolex watch. inferior goods are when income rises demand falls. This is because there are superior options available. (Negative YED value ) I.e Tesco's own baked beans

Answered by Annabel S. Economics tutor

5473 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Evaluate whether globalisation must benefit everybody.


Why does a rise in interest rates lead to a fall in inflation?


Discuss two ways in which a country's international competitiveness could increase (8)


Do only monopolies have monopoly power?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo
Cookie Preferences