How responsive changes in income affect demand is income elasticity (income elasticity of demand). Income is one of the determinants of demand for a product—the demand quantity changes when income changes.In general, the quantity of demand
Elasticity of Demand
Complementary Goods: Meaning, Elasticity
Complementary goods refer to two or more items that are usually consumed simultaneously. Examples are cars and gasoline. We need gasoline as fuel to drive the vehicle.Complementary products may be part of other items such as a motorcycle and tire
Substitute Goods: Meaning, Elasticity, Examples
Substitute goods refer to two or more goods that meet similar needs, so they become alternatives to each other. For example, Coca-Cola is a close substitute for Pepsi. Because it is an alternative, consumers switch to their substitutes when