ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The income elasticity of demand is the percentage change in
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Income divided by the percentage change in price.
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The quantity demanded divided by the percentage change in income.
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The price divided by the percentage change in income.
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Income divided by the percentage change in quantity demanded.
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Explanation:
Detailed explanation-1: -The income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income. For most products most of the time, the income elasticity of demand is positive. In other words, a rise in income will cause an increase in the quantity demanded.
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