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4 Tutorials that teach Income Elasticity Formula by Justin Tapp
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Income Elasticity Formula by Justin Tapp

Income Elasticity Formula by Justin Tapp

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Author: Sophia Tutorial
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Calculate the income elasticity of two goods.

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Tutorial

Source: GRAPHS BY JUSTIN TAPP

Video Chapters

(00:00 - 00:09) Intro
(00:10 - 00:32) Normal and Inferior Goods
(00:33 - 00:46) Luxury Goods
(00:47 - 01:25) Calculating Income Elasticity
(01:26 - 02:53) Income Elasticity Example
(02:54 - 03:14) Review

Terms to Know
Income Elasticity

An economic measure of change in relation to income and demand for normal, inferior and luxury goods.

Inferior Goods

Goods for which demand decreases as income increases.

Luxury Goods

A good that offers better quality and features which is consumed when income rises.

Normal Goods

Goods for which demand increases as income increases.

Formulas to Know
Income Elasticity

E equals fraction numerator bevelled fraction numerator open parentheses Q subscript A minus Q subscript B close parentheses over denominator open parentheses Q subscript A plus Q subscript B close parentheses end fraction over denominator bevelled fraction numerator open parentheses I subscript A minus I subscript B close parentheses over denominator open parentheses I subscript A plus I subscript B close parentheses end fraction end fraction