In this lecture notes you will find in depth notes for the topic "YED" Theme 1 of Edexcel A level business which is called marketing and people.The textbook "Edexcel AS/A level BUSINESS, 5th edition, Pearson" is referenced in these lecture notes. They are really well written and simple to read and ...
YED (Income Elasticity of Demand)
- YED shows the effect of a change in income on quantity demanded
- Income is an important determinant of consumer demand and YED shows precisely
the extent to which changes in income lead to changes in demand
- Formula:
% CHANGE IN QUANTITY DEMANDED
-------------------------------------------------------- X100
% CHANGE IN INCOME
SUMMARY:
The sign and number provide different information about the relationship between the
income and demand
- YED coefficient >1= Elastic
- YED coefficient <1= Inelastic
- + sign= normal good
- - sign= inferior good
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