If the percentage change in the quantity consumed of pizza is 8 percent and the percentage change in income is 2 percent,what is the income elasticity of demand for pizza?
A) -0.25
B) 4
C) 0.25
D) -4
E) -1

Question

Quizplus · Accepted Answer

The income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. Here, it is 8% / 2% = 4.

If the Percentage Change in the Quantity Consumed of Pizza