Income Elasticity of Demand Calculator









Formula

The formula to calculate the income elasticity of demand is:

\[ \text{IED} = \frac{\text{FD} - \text{ID}}{\text{IF} - \text{II}} \]

Where:

What is Income Elasticity of Demand?

Income elasticity of demand, also known as IED, is the financial term used to describe the change in income of a good or service with the change in demand of that good or service. In other words, it measures how income will increase or decrease with a change in demand.

Example Calculation

Example:

Step 1: Calculate the income elasticity of demand:

\[ \text{IED} = \frac{150 - 100}{60000 - 50000} = \frac{50}{10000} = 0.005 \]