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An income elasticity of demand equal to 2.5 for a particular product means:
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Wize University Microeconomics Textbook > Elasticity
Income Elasticity
3 Activities
An income elasticity of demand equal to 2.5 for a particular product means:
the demand curve for the product slope upward
the product is an inferior good
a 10 percent increase in income will lead to a 25 percent increase in the quantity demanded
a 25 percent increase in income will result in a 10 percent increase in the quantity demanded
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More Income Elasticity Questions:
Income Elasticity
Diane gets a raise and her income increases from $800 per week to $1,200 per week. Because of her raise she decides to purchase 40 percent more soda each week. Diane's income elasticity for soda is
It is safe to assume that the income elasticity of demand for gourmet meals would be ________ the income elasticity of demand for meals from a junk-food restaurant.
Practice: Income Elasticity
For an inferior good, the income elasticity can have the value:
For an inferior good, the income elasticity can have the value