Question

State the formula of income elasticity of demand.​

Answer 1

Explanation:

• Income elasticity of demand is an economic measure of how responsive the quantity demand for a good or service is to a change in income.
• The formula for calculating income elasticity of demand is the percent change in quantity demanded divided by the percent change in income.
• Businesses use the measure to help predict the impact of a business cycle on sales.

Answer 2

Answer:

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The formula for calculating income elasticity of demand is the percent change in quantity demanded divided by the percent change in income. Businesses use the measure to help predict the impact of a business cycle on sales.