If the percentage change in the income of the consumer is 20% and the percentage change in the demand for a good is 8%, the good can be described as being _____.
A) perfectly income elastic
B) income inelastic
C) perfectly income inelastic
D) income elastic

Question

Quizplus · Accepted Answer

The good is income inelastic because the percentage change in demand (8%) is less than the percentage change in income (20%), indicating that the demand for the good does not increase as much as the income does.

If the Percentage Change in the Income of the Consumer