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 60 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 :)

Sarahjh

  • Member
  • Posts: 370
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Children of people with alcoholism are more inclined to drink alcohol or use hard drugs. In fact, they are 400 times more likely to use hard drugs than those who do not have a family history of alcohol addiction.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

A method to measure the lateral movement of membrane proteins. A method to measure the lateral movement of membrane proteins.
Using a sphygmomanometer to measure blood pressure. Using a sphygmomanometer to measure blood pressure.
What are examples of ideal forms? What are examples of ideal forms?
Ten Leading Causes of Death in Low-Income Countries, 2008 Ten Leading Causes of Death in Low-Income Countries, 2008
Relationship between Latitude and Income per Capita Relationship between Latitude and Income per Capita
Variable and absorption costing, explaining operating-income differences. Variable and absorption costing, explaining operating-income differences.
Video: Energy sources - types

For a complete list of videos, visit our video library