If, when income increases by 2 per cent and the price does not change, the quantity of airplane travel demanded increases by 6 per cent, the income elasticity of demand for airplane travel is

Question

Quizplus · Accepted Answer

The income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. In this case, it is 6% / 2% = 3.00, indicating that airplane travel is a normal good with a positive income elasticity of demand.

If, When Income Increases by 2 Per Cent and the Price