Income elasticity of demand is defined as the responsiveness of ______.

quantity demanded to a change in income

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quantity demanded to a change in price

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price to a change in income

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income to a change in quantity demanded

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Solution

The correct option is B quantity demanded to a change in income

Income elasticity of demand measures the responsiveness of the quantity demanded for a good or service to a change in the income of the people demanding the good. It is calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.

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