Question #112899

Mr.Ali has an income of 30000 and he purchase 100units. His income decreases by 20% and now he can purchase 90uni hits calculate income elasticity

Expert's answer

"Ei= \\frac{ \\Delta Q}{\\Delta Income}" .

"\\Delta Q = \\frac{90-100}{100}=-10"%.

"\\Delta Income = 20" %.

So, "Ei = \\frac{-10}{20}=-0.5."

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