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3 years ago

Please help need this done for class tomorrow!

Business

1 answer:

Ivanshal [37]3 years ago

7 0

Answer:

0.31

Explanation:

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

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

Percentage change in income = $\frac{1000-300}{300}$ = 2.3

when income was $300, ramen was demanded twice, that is 2/7 times a week. converting to fraction gives 0.29

Percentage change in quantity = $\frac{0.5 - 0.29}{0.29}$ = 0.72

0.72/2.3 = 0.31

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Read 2 more answers

Income elasticity measures the:____.

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Answer:

C. Responsiveness of quantity demanded to a percentage change in income.

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Income elasticity is defined as the responsiveness of the quantity of a good demanded by an individual as his income changes, all other factors being constant.

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