12. For which product is the income
A. Bread
B. Gas
C. Generic beer
D. Milk
Introduction
The income elasticity of demand refers to the proportionate change in a product's demand in response to a consumer's income change. The ratio of the change in quantity demanded to the change in customer revenue can also be used to describe it.
Greater income elasticity of demand shows that consumers have the propensity to make more purchases when their income increases. Parallel to this, if there is a decline in income, consumers exhibit a predisposition towards thrifty purchases, which involves reducing the number of products and services they buy.
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