Income elasticity

Income elasticity

Bachelor of Business Studies (BBS) — First Year

Subject: Microeconomics for Business (MGT 207)

Unit 3: Elasticity of Demand and Supply

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of income elasticity.
• Explain the economic reasoning and use appropriate diagrams or relationships in business analysis.

Curriculum Scope

• Meaning and degrees
• Percentage/proportionate and average calculation methods

Detailed Microsyllabus

1. Income elasticity

   1. Response of quantity demanded to income changes.
   2. Positive, negative and unitary income responses.
   3. Normal and inferior goods.

2. Measurement and interpretation

   1. Percentage method and average or arc method.
   2. Classification of necessities and luxuries within normal goods.
   3. Business implications of changes in customer income.

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Curriculum reference: Tribhuvan University, Faculty of Management, BBS curriculum with first-year syllabus, PDF pages 17-19.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit lecture hours apply to the whole unit; no separate topic hours or marks are assigned here. The programme subject list identifies this course as MGT 207; the detailed subject heading in the source prints MGT 203.