A 10 percent decrease in income decreases the quantity demanded of pizza by 3 percent. The income elasticity of demand for pizza is
A) -0.3.
B) 0.3.
C) 3.3.
D) 10.0.

Name: A 10 percent decrease in income decreases the quantity demanded of pizza by 3 percent. The income elasticity of demand for pizza is A) -0.3. B) 0.3. C) 3.3. D) 10.0.
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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. Here, it is -3% / -10% = 0.3.

A 10 Percent Decrease in Income Decreases the Quantity Demanded