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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
for some goods and some ranges of income, consumer income might not have an impact on purchase decision at all. Hence for those goods, income elasticity of demand is zero.
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4.3. Income Elasticity of Demand: Normal and Inferior Goods
up but inferior for a high-income group of consumers. As their respective income levels rose, the moderate group might purchase more BMWs whereas the upper-income group might buy fewer 3-series as they traded up to a 5- or 7-series.) Clearly, <span>for some goods and some ranges of income, consumer income might not have an impact on purchase decision at all. Hence for those goods, income elasticity of demand is zero. Thinking back to our discussion of the demand curve, recall that we invoked the assumption of “holding all other things constant” when we plotted the relationship between p


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