Slutsky and Elasticities

• What is arc income elasticity of demand? Income Elasticity Example = 0.85 0.57 0.66 = (400-200)/[(400+200)/2] (9-5)/[9+5)/2] = % change in income % change in quantity Interpretation? If the income elasticity is The good is classified as Greater than 1.0 A luxury and a normal good Less than 1.0 but greater than 0.0 A necessity and a normal good ................
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