{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

6-3OtherElasticityConcepts

6-3OtherElasticityConcepts - Other Elasticity Concepts How...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Other Elasticity Concepts How much of a shift?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Other Elasticity Concepts Other elasticities can be useful in specifying the effects of a shift factor of demand: Income elasticity of demand. Cross-price elasticity of demand.
Image of page 2
Income Elasticity of Demand Income elasticity of demand – the percentage change in demand divided by the percentage change in income.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Income Elasticity of Demand Income elasticity of demand tells us the responsiveness of demand to changes in income.
Image of page 4
Income Elasticity of Demand An increase in income generally increases one’s consumption of almost all goods. The increase may be greater for some goods than for others.
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Income Elasticity of Demand Normal goods are those whose consumption increases with an increase in income. They have income elasticities greater than zero.
Image of page 6
Income Elasticity of Demand Normal goods are divided into luxuries and necessities.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Income Elasticity of Demand Luxuries are goods that have an income elasticity greater than one.
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern