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Elasticity and Its Applications, Income Elasticity of Demand measures how…
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Income Elasticity of Demand measures how much the quantity demanded of a good responds to a change in consumers' income
Income Elasticity important because they can tell us about the distributional income of taxes. Eg. taxing a necessity is bad for equality
Price Elasticity of Demand is measure of how much the quantity demanded of a good responds to a change in the price of that good.
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