Income elasticity of demand measures the responsiveness of quantity demanded to changes in:
A)price.
B)income.
C)demand substitutes.
D)demand complements.

Question

Quizplus · Accepted Answer

Income elasticity of demand measures the extent to which the quantity demanded for a good changes in response to a change in income of the consumer. This means that it measures the responsiveness of demand to changes in income, not changes in price, substitutes, or complements. Income elasticity of demand measures the responsiveness of quantity demanded to changes in income.

Income Elasticity of Demand Measures the Responsiveness of Quantity Demanded