Bobo Motors is tracking sales of its Marathon model. In 2012, 45,000 units where demanded and average income was 109,000 Chitis. In 2009, 36,000 cars were demanded and average income was 93,000 Chitis. Assuming the only difference between 2009 and 2012 was a change in average income, what is income elasticity of demand?
Bobo Motors is tracking sales of its Marathon model. In 2012, 45,000 units where demanded and average income was 109,000 Chitis. In 2009, 36,000 cars were demanded and average income was 93,000 Chitis. Assuming the only difference between 2009 and 2012 was a change in average income, what is income elasticity of demand?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Bobo Motors is tracking sales of its Marathon model. In 2012, 45,000 units where demanded and average income was 109,000 Chitis. In 2009, 36,000 cars were demanded and average income was 93,000 Chitis. Assuming the only difference between 2009 and 2012 was a change in average income, what is income
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Step 1
Income elasticity of demand: - Income elasticity of demand measures the responsiveness of change in demand due to change in consumer's income.
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