Answer to Question #259361 in Microeconomics for hfk

Question

what is the income elasticity of flower demand

Answer 1

This is an economic measure of the responsiveness of the quantity demanded for the flowers to a change in income of an individual. The formula for calculating it is the percent change in quantity demanded for the flowers divided by the percent change in income of an individual.

$€d=(ΔD/D)/(ΔI/I)$

Where;

€_d = Income Elasticity of flowers

ΔD= Change in demand for flowers

ΔI=Change in income of the individual.