Income elasticity of demand is the percentage change in the
A) demand for a good that results from a 1% change in an agent's income
B) demand for a good that results from a given percentage change in its price
C) hours worked for a given percentage change in the wage

Question

Quizplus · Accepted Answer

Income elasticity of demand measures the responsiveness of demand for a good to a change in the income of the consumers who buy the good. It is calculated as the percentage change in the quantity demanded of a good divided by the percentage change in the income of the consumer.

Income Elasticity of Demand Is the Percentage Change in the