Question

If income elasticity of demand is 2.12, it means that quantity demanded will __________ by 2.12 percent for every __________ percent __________ in income.

Answer 1

rise, 1.0, rise

Step-by-step explanation:

As we know that

Income elasticity of demand is

= Percentage change in quantity demanded ÷ Percentage change in income

So,

Percentage change income

= 2.12% ÷ 2.12

= 1%

Therefore if the income increased that also leads to increase in quantity demanded

We simply applied the Income elasticity of demand formula so that we can get to know the situation