The ________ measures the change in the quantity demanded of a good due to a percentage change in consumers' income.
A) substitution effect of a price change
B) income effect of a price change
C) cross-price elasticity of demand
D) income elasticity of demand

Question

Quizplus · Accepted Answer

The income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in consumers' income. It is calculated as the percentage change in quantity demanded divided by the percentage change in income. It can be positive or negative, indicating whether the good is a normal or inferior good, respectively.

The ________ Measures the Change in the Quantity Demanded of a Good