What is income elasticity?
A) the percent change in quantity demanded divided by the percent change in consumer income.
B) the percent change in consumer income divided by the percent change in quantity demanded.
C) the percent change in quantity supplied divided by the percent change in consumer income.
D) the percent change in consumer income divided by the percent change in quantity supplied.

Question

Quizplus · Accepted Answer

Income elasticity measures how much the quantity demanded of a product changes in response to a change in consumer income. It is calculated as the percentage change in quantity demanded divided by the percentage change in consumer income. This helps measure the degree to which a product is a luxury or a necessity, and can help businesses make decisions about pricing and marketing strategies.

What Is Income Elasticity