help with economics concepts pls?

Why is that my textbook describes income elasticity of demand as being reflected by the extent of shift in the demand curve? What is the logic behind it?

1 Answer

  • 7 years ago
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    income elasticity is an increase/decrease in quantity demanded with a rise/fall in level of income.

    Clearly, the demand curve being the function of factors like income (e.g. if you earn 200$ more than before, at same price, you will be able to buy more of a particular good, indicating shift of demand curve at any price level), when income increases, quantity demanded increases, suggesting dQ/dI > 0

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