Answer to Question #112802 in Microeconomics for vania fatima

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.
1
Expert's answer
2020-04-30T09:59:04-0400

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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