The income elasticity of demand for smartphones is equal to 1.41.
<h3>What is the
income elasticity of demand?</h3>
The income elasticity of demand can be defined as an economic measure of the degree of responsive of the quantity demanded for a particular good or service with respect to a change in income.
Mathematically, the income elasticity of demand can be calculated by using the following formula;
Income elasticity of demand = (Q₂ - Q₁)/[(Q₂ + Q₁)/2]/(P₂ - P₁)/[(P₂ + P₁)/2]
Income elasticity of demand = Percentage change in quantity demanded)/(Percentage change in income)
Substituting the given parameters into the formula, we have;
Income elasticity of demand = (5,250 - 4,900)/[(5,250 + 4,900)/2]/(21 - 20)/[(21 + 20)/2]
Income elasticity of demand = 6.897/4.878
Income elasticity of demand = 1.41.
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