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Price Determination and Elasticity

Quick questions on Income and cross elasticity of demand explained: O-Level Economics

2short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is income elasticity of demand?
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$YED=% change in quantity demanded% change in income\text{YED} = \frac{\%\ \text{change in quantity demanded}}{\%\ \text{change in income}}$
What is cross elasticity of demand?
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$XED=% change in quantity demanded of good A% change in price of good B\text{XED} = \frac{\%\ \text{change in quantity demanded of good A}}{\%\ \text{change in price of good B}}$

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