The income elasticity of demand is the
A) absolute change in quantity demanded resulting from a one unit increase in income.
B) percent change in quantity demanded resulting from the absolute increase in income.
C) percent change in quantity demanded resulting from a one percent increase in income.
D) percent change in income resulting from a one percent increase in quantity demanded.
E) percent change in income resulting from a one percent increase in price.

Question

Quizplus · Accepted Answer

The income elasticity of demand measures the percentage change in quantity demanded resulting from a one percent increase in income. It is calculated as follows: (percent change in quantity demanded) / (percent change in income). Therefore, choice C is the correct answer. Choices A, B, D, and E are incorrect.

The Income Elasticity of Demand Is the