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प्रश्न
If demand falls by 5 percent due to an increase in income by 20 percent, calculate the income elasticity of demand. What type of commodity is this?
संख्यात्मक
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उत्तर
ey = `"Percentage change in demand"/"Percentage change in income"`
= `(–5)/20 = – 0.25`
Since income elasticity of demand is negative, this is an inferior good.
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