Income Elasticity Of Demand
The degree to which a demand for a good changes with respect to a change in income depends on whether the good is a necessity or a luxury. The demand for necessities will increase with income, but at a slower rate. This is because consumers, instead of buying more of only the necessity, will want to use their increased income to buy more of a luxury. During a period of increasing income, demand for luxury products tends to increase at a higher rate than the demand for necessities.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
income elasticity of demand — ➔ elasticity of demand * * * income elasticity of demand UK US noun [U] ► ECONOMICS the degree to which the number of products bought changes when income changes: » In Japan, the income elasticity of demand for exports is far higher than for… … Financial and business terms
Income elasticity of demand (YED) — In economics, the income elasticity of demand measures the responsiveness of the quantity demanded of a good to the change in the income of the people demanding the good. It is calculated as the ratio of the percent change in quantity demanded to … Wikipedia
elasticity of demand — The degree of buyers responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of demand to price, e.g.,… … Financial and business terms
income elasticity — elasticity of demand with respect to income, measure of how responsive the level of demand is to a change in income (Finance) … English contemporary dictionary
Price elasticity of demand — Not to be confused with Price elasticity of supply. PED is derived from the percentage change in quantity (%ΔQd) and percentage change in price (%ΔP). Price elasticity of demand (PED or Ed) is a measure used in economics to show the… … Wikipedia
Wealth elasticity of demand — in microeconomics is the relation of the proportional change in consumption of a good to a proportional change in wealth (as distinct from changes in personal income). Measuring and accounting for the variability in this elasticity is a… … Wikipedia
Cross elasticity of demand — Economics … Wikipedia
Elasticity — may refer to:*Elasticity (physics), continuum mechanics of bodies which deform reversibly under stressVarious uses are derived from this physical sense of the term, especially in economics:*Elasticity (economics), a general term for a ratio of… … Wikipedia
Elasticity (economics) — Economics … Wikipedia
Demand (economics) — Demand redirects here. For other uses, see Demand (disambiguation). In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay (see also supply and demand). The term demand signifies the ability… … Wikipedia