demand function Expenditure elasticity of Demand = One percent increase in the household's total expenditure, M, brings about what percentage change in household-level demand for good j, Dj
Price elasticity of Demand = change in demand divided by change in price
mnli hypothesis: Price elasticity of Demand = change in demand divided by change in price premise: demand function Expenditure elasticity of Demand = One percent increase in the household's total expenditure, M, brings about what percentage change in household-level demand for good j, Dj