If you buy 10% more compact discs in response to a 20% increase in income,your income elasticity for compact discs is _____.
A)0.5
B)1.0
C)2.0
D)0.0

Name: If you buy 10% more compact discs in response to a 20% increase in income,your income elasticity for compact discs is _____. A)0.5 B)1.0 C)2.0 D)0.0
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Question

Quizplus · Accepted Answer

Income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. Here, it's (10%/20%) = 0.5.

If You Buy 10% More Compact Discs in Response to a 20