If your income increases by 20% and as a result your quantity demanded of DVDs increases by 10%, your income elasticity of demand for DVDs is:
A) 2
B) 0.5
C) - 1
D) 0.1

Name: If your income increases by 20% and as a result your quantity demanded of DVDs increases by 10%, your income elasticity of demand for DVDs is: A) 2 B) 0.5 C) - 1 D) 0.1
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Question

Quizplus · Accepted Answer

Income elasticity of demand = % change in quantity demanded / % change in income = 10% / 20% = 0.5

If Your Income Increases by 20% and as a Result