By now you probably understand how elasticities work. Just
to be clear, however, let's review the formulas for income elasticity. To the left is the general, intuitive expression for income elasticity. 
To the right is the arc formula for income elasticity. In either case, we see that 
is the rate of change in desired quantity demanded due to a change in income. In other words, the income elasticity is a measure of the responsiveness of demand to a change in income.
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