How do you calculate income elasticity of demand?

1 Answer
Jan 4, 2016

Answer:

It is the percentual variation in quantity demanded for each #1%# of income variation.

Explanation:

Its formula is given by:

(#%# change in demand) / (#%# change in income)#

#((DeltaQ)/Q)/((DeltaI)/I#

Where #Q# is quantity demanded and #I# is income.