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18 March, 07:24

Sarah recently got a 10 percent raise. she now purchases 30 percent more in groceries on a weekly basis. sarah's income elasticity for groceries is

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  1. 18 March, 07:31
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    Sarah's income elasticity for groceries = percentage increase in grocery / percentage raise in income.

    Elasticity for groceries = 30 / 10 = 3

    Therefore, Sarah's income elasticity for groceries = 3.

    Income elasticity is a value, which measures the responsiveness of the quantity demanded for a good or service to a change in the income of the consumers demanding for the good.
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