Answered

IDNLearn.com is designed to help you find reliable answers to any question you have. Our community is here to provide detailed and trustworthy answers to any questions you may have.

Suppose that demand for automobiles increases by 30% when consumers’ incomes increase by 25%. What is the income elasticity of demand for automobiles? round your answer to two decimal places.

Sagot :

Parrainidn

When the above situation occurs, we can say that the income elasticity of demand for automobiles is 1.2.

What is the income elasticity of the automobiles?

This can be found by the formula:

= Change in quantity demanded of automobiles / Change in income

Solving gives:

= 30% / 25%

= 1.2

In conclusion, the income elasticity here would be 1.2.

Find out more on income elasticity of demand at https://brainly.com/question/3980051.

We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Your questions are important to us at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.