When the quantity demanded of a commodity increases with increase in income and decreases with decrease in income, the income elasticity of demand will be

Q. Price elasticity of demand is found to be

(-) 2

. Price falls from

R s . 10

per unit to

R s . 8

per unit. Find the percentage increase in quantity demanded.

Q. One per cent change in income causes

10

per cent increase in quantity demanded. Elasticity of demand is ___________.

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If the quantity of CD demanded increases from 260 to 290 in response to an increase in income from Rs.9000 to Rs.9800, the income elasticity of demand is approximately _________.

The correct option is A 1.3Elasticity==%△Q%△Y=30260×1008009000×100=1.3.

If the quantity of CD demanded increases from $260$ to $290$ in response to an increase in income from $R s . 9000$ to $R s . 9800$ , the income elasticity of demand is approximately _________.

The correct option is A $1.3$
$E l a s t i c i t y =$
$= \frac{% △ Q}{% △ Y}$
$= \frac{\frac{30}{260} \times 100}{\frac{800}{9000} \times 100} = 1.3$ .