Can you explain income elasticity of demand?
Income elasticity of demand (YED) is the relationship between a change in quantity demanded for a good and the change in real income. some goods are normal and some inferior. Normal means a rise in income results in rise demand (positive income elasticity of demand value) i.e car, Rolex watch. inferior goods are when income rises demand falls. This is because there are superior options available. (Negative YED value ) I.e Tesco's own baked beans
AS
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