Suppose iceberg lettuce has an income elasticity of demand of 0.35.A 10 percent increase in income causes the quantity demanded of iceberg lettuce to _______________ by ______________ percent.
A)rise;3.5
B)rise;28.57
C)fall;28.57
D)fall;3.5

Question

Quizplus · Accepted Answer

If the income elasticity of demand for iceberg lettuce is 0.35, a 10% increase in income will lead to a 3.5% increase in the quantity demanded of iceberg lettuce. Therefore, the answer is A.

Suppose Iceberg Lettuce Has an Income Elasticity of Demand of 0.35.A