Asked by Shayle Lliaban on Jul 25, 2024
Verified
The income elasticity of demand is calculated as the
A) percentage change in quantity demanded multiplied by the percentage change in income.
B) percentage change in income divided by the percentage change in quantity demanded.
C) percentage change in quantity demanded divided by the percentage change in income.
D) percentage change in income divided y the percentage change in price.
Income Elasticity
A measure of how much the quantity demanded of a good responds to a change in consumers' income.
- Understand the relationship between income elasticity of demand and changes in quantity demanded resulting from variations in income.
Verified Answer
PC
Paige CaldwellJul 29, 2024
Final Answer :
C
Explanation :
The income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income, which measures how much the quantity demanded of a good responds to a change in consumers' income.
Learning Objectives
- Understand the relationship between income elasticity of demand and changes in quantity demanded resulting from variations in income.