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income elasticity of demand

Calculate the income elasticity of demand for food if an increase in income from £25,000 to £30,000 leads to an increase in the quantity demand of food of 10%.
please show all working
= 0.5I think, price elasticity is percentage change in demand/price and income is the percentage change in demand/income I think from last years memories..
another tip is just to remember that if income increases and demand for a good, it's a normal good so will be positives
(edited 8 years ago)
Reply 2
Avatar for catwat99
catwat99
3
Income elasticity of demand = % change in demand / % change in income
% change = change / original value
Use these formulas to help you
Original post by catwat99
Income elasticity of demand = % change in demand / % change in income
% change = change / original value
Use these formulas to help you


I'm glad I looked at this thread as it's basically revision for stuff I learnt last year lol, you planning to study econ at uni out of interest?
Reply 4
Avatar for catwat99
catwat99
3
Original post by Conservationofmass
I'm glad I looked at this thread as it's basically revision for stuff I learnt last year lol, you planning to study econ at uni out of interest?

No, I'm hoping to do something relating to finance at uni instead. I learnt this in business studies btw, my college didn't offer economics.
Which uni's have you applied to? I'm in y12 but trying to find out which ones have the best business schools
Reply 5
Avatar for jpt4749
jpt4749
14
It is 0.5 as percentage of income is 5000/25000 = 20 %

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