A consumer's weekly income is $250, and the consumer buys 12 bars of chocolate per week. When weekly income increases to $280, t

Question

bogdanovich [222]

2 years ago

15

A consumer's weekly income is $250, and the consumer buys 12 bars of chocolate per week. When weekly income increases to $280, t

he consumer buys 13 bars per week. The income elasticity of demand for chocolate by this consumer is about

Business

1 answer:

Vikentia [17] · Answer 1 · 2022-11-02T01:57:17+03:00

Answer:

0.69

Explanation:

Given that we have the formula for calculating income elasticity of demand as the percent change in quantity demanded divided by the percent change in income, hence, we have the percent change in quantity demanded => 13 - 12 = 1 ÷ 12 = 0.083

the percent change in income => 280 - 250 = 30 ÷ 250 = 0.12

Therefore we have => 0.083 ÷ 0.12 = 0.69

Hence, the final answer is 0.69