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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (70539)	5/28/2001 12:46:54 PM
From: goldsheet	Read Replies (1) \| Respond to of 116768

> So if disposable income rises, and price rises too, what is the income-price elasticity of demand? Actually what I was thinking was, "what if income rises and price drops" (like over the last 5 years) If price elasticity was 1, and gold dropped 30% (1996-to-date) demand should go up 30% If income elasticity was 1, and real income rose 50% (1996-to-date) demand should go up 50% So do we have a multiplier effect ? (1 + 30%) * (1 + 50%)= 195% (gold demand should have doubled in the last five years) Of course, the multipliers are not 1 so we have: (1 + [(price change)(price elasticity)]) (1 + [(income change)*(income elasticity)])