The income elasticity of demand is (mathematically)
A)The percentage change in income divided by the percentage change in price
B)The percentage change in quantity demanded divided by the percentage change in price.
C)The percentage change in quantity demanded divided by the percentage change in income.
D)The percentage change in the portion of a person's budget that they will spend on a good divided by the percentage change in income

Question

Quizplus · Accepted Answer

Income elasticity of demand measures the responsiveness of quantity demanded to a change in income. It is calculated by dividing the percentage change in quantity demanded by the percentage change in income.

The Income Elasticity of Demand Is (Mathematically)