Income Elasticity Calculator

Initial Quantity Demanded:

Initial Income ($):

New Quantity Demanded:

New Income ($):

Product Name (Optional):

Market Context:

Income Elasticity of Demand: 0.00

Percentage Change in Quantity: 0%

Percentage Change in Income: 0%

Good Classification: Normal Good

Elasticity Interpretation: Income Inelastic

Market Implication: Stable demand with income changes

Formula: Income Elasticity = (% Change in Quantity Demanded) / (% Change in Income)

Normal Goods (YED > 0): Demand increases as income increases.

Inferior Goods (YED < 0): Demand decreases as income increases.

Luxury Goods (YED > 1): Income elastic - demand increases more than proportionally to income.

Necessity Goods (0 < YED < 1): Income inelastic - demand increases less than proportionally to income.

Business Application: Helps predict demand changes during economic cycles and target appropriate income segments.