Question

Research by Luo and Song showed that, in rural China from 2003 to at least 2008, income elasticity of consumer demand for food was slightly less than 1, meaning that the overall growth rate of consumer demand for food was __________.

Answer 1

The correct answer is: less than growth rate of consumer's income.

Step-by-step explanation:

The income elasticity of demand measures the degree of responsiveness of quantity demanded of a commodity to a change in the income of the consumer. This is the ratio of change in quantity demanded due to a change in the income of the consumer. The income elasticity of demand less than one means that the change in the income of the consumer is greater than the change in the quantity demanded of the product.

In other words, the change in the consumer demand for food is less than the change in the income of the consumer.