The income elasticity of demand is a measure of
A) the extent to which the supply of a good changes when the demand changes as a result of a change in income.
B) the extent to which the demand for a good changes when income changes.
C) how responsive suppliers are to changes in the price of a product.
D) how responsive consumers are to changes in the price of a product.
E) how demand for a product changes when the price of a substitute or complement product changes.

Question

Quizplus · Accepted Answer

The income elasticity of demand measures the percentage change in the quantity demanded of a good resulting from a one percent change in income. In other words, it indicates the extent to which the demand for a good changes when income changes.

The Income Elasticity of Demand Is a Measure of