Income elasticity help?
If income increases from $100 to $150 and demand increases from 1 to 2, then income elasticity is
-1.1
1.67
1.5
2.0
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If income increases from $100 to $150 and demand increases from 1 to 2, then income elasticity is
-1.1
1.67
1.5
2.0
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Answers & Comments
Verified answer
The %increase in demand=(2-1)/1x100=100%
The % increase in income=(150-100)/100x100=50%
The income elasticity=100/50=2
2.0
It's 100%/50%