Question

If the demand for clothing increases by 8% when income increases by 10%, the income elasticity of clothing, using one decimal place and the negative sign if necessary, is _____.

Answer 1

Answer:

0.8

Explanation:

Income elasticity of demand measures the responsiveness of quantity demanded to changes in the income of the consumer.

Income elasticity of demand = percentage change in quantity demanded / percentage change in income

8% / 10% = 0.8

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