Income of a person is 8000 and he uses 60 units of a commodity. Calculate income elasticity of demand when the income increased by 30% and consumption of the good is decline by 50% Calculate 1. New income 2. New consumption 3. Income elasticity 4. Nature of good

Q: Income of a person is Rs.8000 and he uses 60 units of a commodity.   Calculate income elasticity…

A: Given ,  initial income Y 1 = Rs 8000 Initial consumption = 60 units. The three sub parts are solved…

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A: Income elasticity of demand depicts how much consumer responds with the change in his income.

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Q: Income of a person is Rs.8000 and he uses 60 units of a commodity.   Calculate income elasticity…

A: Given: Income- Rs. 8000 and 60 units consumption The income elasticity of demand can be calculated…

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Q: Q) Income of a person is Rs.8000 and he uses 60 units of a commodity. 1.Calculate income elasticity…

A:

Q: Income of a person is Rs.8000 and he uses 60 units of a commodity. Calculate income elasticity of…

A: Income elasticity of demand measures the sensitivity of quantity demanded of a good or a service to…

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Q: Income of a person is 8000 and he uses 60 units of a commodity. Calculate income elasticity of…

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Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.