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