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

AS
Answered by Annabel S. Economics tutor

6619 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is meant by a monopoly?


The UK suffers from a persistent balance of trade deficit. what can the government do to rectify this and balance the trade figures?


What causes the aggregate demand curve to shift?


What does the Price Elasticity of Demand measure? How is it calculated? And why is it important?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning