The responsiveness of demand to changes in income while holding the good's relative price constant is
A) slope of the demand curve.
B) price elasticity of supply.
C) cross-price elasticity.
D) price elasticity of demand.
E) income elasticity of demand.

Question

Quizplus · Accepted Answer

The responsiveness of demand to changes in income while holding the good's relative price constant is called income elasticity of demand. It measures the percentage change in the quantity demanded of a good or service in response to a one percent change in income. The other options, such as slope of the demand curve, price elasticity of supply, and cross-price elasticity, do not directly capture the impact of changes in income on demand.

The Responsiveness of Demand to Changes in Income While Holding