YED

• what is YED?

  YED stands for Income Elasticity of Demand. it measures the responsiveness of demand to changes in income
• what is the formula for YED?

  YED = (%change in Qd) / (%change in income)
• what is the range of figures for a product that is income elastic?

  -infinity to -1 and 1 to infinity
• what is the range of figure for a product that is income inelastic?

  -1 to 1
• what is the range of figures in YED for a inferior good?

  0 to -infinity (negative numbers)
• what is the range of figures (YED) for a normal good?

  0 to infinity (positive numbers)
• what is the range of figures for a necessity (YED)?

  -1 to 1
• what is the range of figures for a luxury good (YED)?

  1 to infinity
• what does it mean if a good is inferior?

  as income increases demand decreases
• what does it mean if its a normal good?

  as income increases demand increases