78 452
Assignments Done
Successfully Done
In September 2019

Answer to Question #24510 in Economics of Enterprise for loide

Question #24510
Mensy Ltd produces two goods that have income elasticity values as follows. Good A=-0.5 and good B=4 Explain the income elasticity of demand for good A and good B
Expert's answer
The Income Elasticity of Demand measures the rate of response of quantity demand due to a raise (or lowering) in a consumers
Good A has IEoD < -0.5. It is an Inferior Good and Negative Income
Inelastic . Inferior goods can be viewed as anything a consumer would demand
less of if they had a higher level of real income.
Good B has IEoD > 1. It is a Luxury Good and Income Elastic. A good is
considered a luxury when a person must have a certain income or wealth level in
order to feasibly purchase it.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


No comments. Be first!

Leave a comment

Ask Your question

Privacy policy Terms and Conditions