If the quantity of carrots demanded increases by a large percentage when income increases by a small amount, we know that the demand for carrots is
A)price elastic.
B)price inelastic.
C)income inferior.
D)income inelastic.
E)income elastic.

Question

Quizplus · Accepted Answer

Income elasticity of demand measures how the quantity demanded of a good responds to a change in income. If the quantity demanded increases by a large percentage with a small increase in income, the demand is income elastic.

If the Quantity of Carrots Demanded Increases by a Large