Tag Archives: lit

Income elasticity of demand

12 Jun

Income elasticity of demand is best defined as the receptiveness of the quantity demanded for a good or service in alteration to the income of the people demanding such goods or services.

A product that I consume on a daily basis is water. If the price of a water bottle went up and my income decrease I would stop buying water.

A product that people still buy regardless of its price would be the iPhones.

Name a product that people would still buy regardless if the prices increases or decreases?