ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An individual reacts to a 5% increase in the price of good X by increasing the proportion of his income that he spends on good X from 2% to 3%.If there are no other changes, what can be concluded from this about the individual’s demand for good X?
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It is income-elastic.
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It is income-inelastic.
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It is price-elastic.
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It is price-inelastic.
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Explanation:
Detailed explanation-1: -7 An individual reacts to a 5% increase in the price of good X by increasing the proportion of his income that he spends on good X from 2% to 3%. If there are no other changes, what can be concluded from this about the individual’s demand for good X? A It is income-elastic.
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