Answer to Question #67716 in Microeconomics for Jay

Question

A manufacturer is in the market for shirts. When the income of the population changed by 12%, quantity demanded for shirts change from 8,000 shirts per month to 8,500. Calculate income elasticity?

Answer 1

Income elasticity is calculated as
E_I=∆Q/Q:∆I/I
So,
E_I=(8,500-8,000)/8,000:0,12=0.5208