ECON101: Principles of Microeconomics

Let's now delve into the analysis of income elasticity of demand. Watch this video to explore this concept, paying close attention to the interpretation of results. Income elasticity of demand results provide valuable information for both firms and the government. They help us understand how much consumers' quantity demanded reacts to a change in income at a specific price and determine whether, at that given price and within a particular income bracket, the analyzed good or service is normal or inferior.