JC H2 Economics Study Notes – 7. Income
Previously, we cover the concepts of the price elasticity of DD and of SS. Now, we move
onto income & cross elasticities of demand. Think of such concepts as an extension to the
basic demand factor of income, and of related goods and services. For related products, do
make sure to clearly highlight if you mean substitutes in demand, or substitutes in supply,
and so on.
Elasticity of demand for a good measures the responsiveness of quantity demanded to a
change in one of its determinants. In this chapter, we focus only two 2 determinants of
income and related products. We focus on the price factor, the non-price factor of incomes
and prices of related goods. This is only for H2 Economics pupils, you have 2 more elasticity
concepts to apply in your tests of Econs essays and case study papers.