A 10 percent increase in buyers' incomes results in a 5 percent drop in the quantity of hot dogs demanded.In this range,the income elasticity of demand for hot dogs is
A)0.5
B)2.0
C)5.0
D)-2.0
E)-0.5

Question

Quizplus · Accepted Answer

Income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. Here, it is -5%/10% = -0.5.

A 10 Percent Increase in Buyers' Incomes Results in a 5