Question

Hi guys, could you please help me with this question;
What reason would firms wish to have knowledge in regards to the income elasticity of demand for its products???

Is it because it allows them to see what happens to their total revenue as price changes?????


Since this is not my area of expertise, I searched Google under the key words "<I>income elasticity products</I>" to get these possible sources:

http://www.tutor2u.net/economics/content/topics/elasticity/income_elasticity.htm
http://stats.oecd.org/glossary/detail.asp?ID=3233
http://www.investopedia.com/university/economics/economics4.asp
http://66.102.7.104/search?q=cache:8FJrxFShD_cJ:www.howardcc.edu/social_science/micropdf/3.jb.pdf+income+elasticity+products&hl=en&gl=us&ct=clnk&cd=8&client=safari
http://66.102.7.104/search?q=cache:VEteZZjlGVYJ:www.lancs.ac.uk/staff/ecagrs/What%2520is%2520demand%2520elasticity.doc+income+elasticity+products&hl=en&gl=us&ct=clnk&cd=10&client=safari

I hope this helps. Thanks for asking.