If a good is income elastic, it follows that the percentage change in quantity demanded of a good
A)is less than the percentage change in income.
B)is greater than the percentage change in income.
C)is equal to the percentage change in income.
D)is greater than the percentage change in the price of another good.

Question

Quizplus · Accepted Answer

If a good is income elastic, it means that the quantity demanded of that good is sensitive to changes in income. Therefore, if income increases by a certain percentage, the demand for the good will increase by a greater percentage (greater than the percentage change in income), and vice versa if income decreases. This makes option B the correct answer.

If a Good Is Income Elastic, It Follows That the Percentage