Zero income elasticity of demand



If there is no any change in quantity of demand due to certain percentage change in income then it is known as zero income elasticity of demand.

We can explain it on the basis of following figure:

economics

 

On the above figure, in initial stage price is OI and quantity of demand is OQ, when income increase to I1 and decreases to I­o­, there is no any change in quantity of demand.


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