This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What does the income elasticity of demand measure? What will be an ideal ... (Read 20 times)

Medesa

  • Hero Member
  • *****
  • Posts: 507
on: Jun 29, 2018
What does the income elasticity of demand measure?
 
  What will be an ideal response?

Question 2

Why are consumers in a competitive market considered to be price takers?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

alexanderhamilton

  • Sr. Member
  • ****
  • Posts: 334
Reply #1 on: Jun 29, 2018
Answer to Question 1

The income elasticity of demand measures how the quantity demanded of a good responds to a change in income. The formula for the income elasticity of demand is the percentage change in the quantity of the good demanded divided by the percentage change in income.

Answer to Question 2

A consumer in a competitive market can buy any quantity of a good without affecting the market price, and is therefore considered to be a price taker. This is because a competitive market is characterized by many buyers and sellers and each consumer only buys a small fraction of the total quantity supplied of a good.


Medesa

  • Member
  • Posts: 507
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

vickybb89

  • Member
  • Posts: 347
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Worldwide Variations in Population and Income Levels Worldwide Variations in Population and Income Levels
Performing a Spirometry Test to Measure Forced Vital Capacity Performing a Spirometry Test to Measure Forced Vital Capacity
Wintrobe tube and Westergren tests are used to measure the ESR. Wintrobe tube and Westergren tests are used to measure the ESR.
Using the voltmeter leads from a starting and charging test unit to measure the voltage drop ... Using the voltmeter leads from a starting and charging test unit to measure the voltage drop ...
The growth in demand for energy use is met by burning fossil fuels The growth in demand for energy use is met by burning fossil fuels
The original Supply and Demand graph The original Supply and Demand graph
Video: Rh blood type and complications during pregnancy & Fertilization

For a complete list of videos, visit our video library