The formula for income elasticity of demand is the same as the formula for price elasticity of demand, except that the word _____ is replaced by the word:
A) demand; supply.
B) price; quantity.
C) price; income.
D) demand; income.

Question

Quizplus · Accepted Answer

The formula for income elasticity of demand replaces the word "price" from the price elasticity of demand formula with "income" to measure how the quantity demanded of a good responds to a change in consumers' income.

The Formula for Income Elasticity of Demand Is the Same