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
Answered by Annabel S. Economics tutor

6122 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How would you structure a 25 mark essay question? For example if the question was " how will an increase in interest rates affect the rental market?"


Explain one disadvantage of increasing the budget deficit


Assume the market for Easter rabbits is currently at long term equilibrium. Assume Australia is the largest supplier of easter rabbits. A sudden explosion in the rabbit population of Australia leading up to Easter. How will the market react?


What is the effect on the UK current account balance following an appreciation of the Sterling?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning