The purchasers of product B have an income elasticity of demand of 1.2. If their income increases by 10%, then by how much should Mickey's sales from product B increase? (in %, not dollars or units, and be sure to put the % sign)
1
Expert's answer
2013-02-04T08:24:01-0500
In economics, income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the people demanding the good, ceteris paribus. It is calculated as the ratio of the percentage change in demand to the percentage change in income. For example, if, in response to a 10% increase in income, the demand for a good increased by 20%, the income elasticity of demand would be 20%/10% = 2. So, in our example if their income increases by 10%, then Mickey's sales from product B will increase by 10%*1.2 = 12%.
Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…
APPROVED BY CLIENTS
Finding a professional expert in "partial differential equations" in the advanced level is difficult.
You can find this expert in "Assignmentexpert.com" with confidence.
Exceptional experts! I appreciate your help. God bless you!
Comments
Leave a comment