Question #112802

Mr.Ali has an income of Rs.30,000 and he purchases 100 units of X-GOOD. His income decreases by 20% and now he can purchase 90 units of X-GOOD.Calculate Calculate elasticity and also mention the type of elasticity.

Expert's answer

The income elasticity is:

"Ei = \\frac{90 - 100}{24,000 - 30,000}\\times\\frac{24,000 + 30,000}{90 + 100} = 9\/19," so X-GOOD is a normal good.

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