Can a consumer have a perfectly inelastic income elasticity for every good they consume? Explain. ...[Show More]
4 years ago
NO, a consumer cannot have perfectly inelastic income elasticity for every good they consume. This is because having a perfectly inelastic income for every good they consume means one has to spend the same sum of income all the time. This is not possible since income level can change. i.e it can increase or decrease this will make the consumer buy less or more goods. If the income for the consumer increases, He or she will consume more or buy a “better” good. And if his income reduces then he will have to cut down consumption by buying less. Therefore a consumer can never have perfectly inelastic income elasticity for every good they consume.
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