When can the income elasticity of demand be negative? - Economics

Advertisements
Advertisements
Short Note

When can the income elasticity of demand be negative?

Advertisements

Solution

In the case of inferior goods, the income elasticity of demand is negative. It shows that as income rises, so does the demand for lower-quality goods, and vice versa.

  Is there an error in this question or solution?
2022-2023 (March) Official

RELATED QUESTIONS

What are the types of Elasticity of Demand.


Income elasticity of demand.


The demand for good rises by 20 percent as a result of all in its price. Its price elasticity of demand is (−) 0.8. Calculate the percentage fall in price.


How is price elasticity of demand affected by:

(i) Number of substitutes of available for the good.

(ii) Nature of the good.


Explain the relationship between

(i) Prices of other goods and demand for the given good.

(ii) Income of the buyers and demand for a good. 


Write an explanatory answer :

What is the price elasticity of demand? Explain the types of price elasticity of demand.


Write short answer for the following question :

Explain the Fectors Determinants of Elastacity of Demand?


State whether the following statements are True or False with reasons: 

The demand of a rich person is elastic. 


Under monopoly, price elasticity of demand is ______


______ refers to the effects of a change in price of commodity X on demand for commodity Y when quantity demanded.


Which of the following points are related with effective demand?


Which of the following influence price elasticity of demand?


Which of the following statement is true?


When the demand of a commodity is inelastic.


______ refers to the minimum price, fixed by the government, which is above the equilibrium price.


When price falls with rise in output, TR is ______ when MR is zero


Identify the correctly matched pair of the items in Column A to that of Column B.

Column A Column B
1. Unitary elastic supply curve (a) U-shaped supply curve
2. Relatively elastic supply curve (b) Vertical line parallel to Y-axis
3. Perfectly elastic supply curve (c) Horizontal line parallel to X-axis.
4. Perfectly inelastic supply curve (d) Downward sloping supply curve

Which of the following statements is true?


If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be ______.


Define income elasticity of demand. 


Share
Notifications



      Forgot password?
Use app×