The income elasticity of demand is defined as the percentage change in
A) the quantity demanded resulting from a given percentage change in price.
B) income divided by the percentage change in quantity demanded.
C) the movement along the demand curve resulting from a change in income.
D) the quantity demanded divided by the percentage change in income.

Question

Quizplus · Accepted Answer

Income elasticity of demand measures how much the quantity demanded of a good responds to a change in consumers' income, calculated as the percentage change in quantity demanded divided by the percentage change in income.

The Income Elasticity of Demand Is Defined as the Percentage