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If income increases by 10% and, in response, the quantity of housing demanded increases by 7%, then the income elasticity of demand for housing is A) -1. B) -0.7.

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Answer:

the income elasticity of demand is 0.7

Step-by-step explanation:

The computation of the income elasticity of demand is shown below:

As we know that

Income elasticity of demand is

= Percentage change in quantity demanded ÷ Percentage change in income

= 7 ÷ 10

= 0.7

hence, the income elasticity of demand is 0.7

The same is relevant

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