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Unit 2.5(2): Income elasticity of demand (YED)

This page focuses on income elasticity of demand (YED). It covers its definition and measurement, and how to interpret different YED values. Income elasticity of demand is the responsiveness of quantity demanded to a change in household income. Yed is measured by the equation: % change in Qd / % change in income = YED For example, an 8% increase in household income leads to a 12% increase in the quantity demanded for...

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