ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The resposiveness of demand to a change in price.
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The responsiveness of demand to a change in income.
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The un-resposiveness of demand to a change in price.
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The un-responsiveness of demand to a change in income.
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Detailed explanation-1: -Income elasticity of demand is an economic measure of how responsive the quantity demanded for a good or service is to a change in income. The formula for calculating income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income.
Detailed explanation-2: -The income elasticity of demand reflects the responsiveness of demand to changes in income. It is the percentage change in quantity demanded at a specific price divided by the percentage change in income, ceteris paribus. Income elasticity is positive for normal goods and negative for inferior goods.
Detailed explanation-3: -Income elasticity of demand measures the responsiveness of the quantity demanded for a good or service to a change in the income of the people demanding the good. It is calculated as the ratio of the percentage change in quantity demanded to the percentage change in income. Was this answer helpful?
Detailed explanation-4: -The price elasticity of demand is defined as the responsiveness of Quantity demanded to a change in price.
Detailed explanation-5: -The price elasticity of demand quantifies how much quantity demanded changes in response to a price change. The income elasticity of demand quantifies how much the amount demanded changes in response to changes in consumer income.