Answer to Question #87083 in Economics of Enterprise for thando gangala

Question

difference between price elasticity of demand and income elasticity of demand

Answer 1

The demand elasticity is an indicator that shows how demand changes when changing the price of goods and services or when changing consumer income.

The main difference between the price elasticity of demand and the demand elasticity of demand is that the elasticity of demand for the price shows how much the demand for a particular product will change with a price change of 1%, and the elasticity of demand for income shows how the demand for goods will change when income changes population.

Hence, the difference is that the influence of various factors (price and non-price) on demand is taken into account.