suppose the income elasticity for ipads is equal to 2 the th

suppose the income elasticity for ipads is equal to 2 the this means,

a-if income increases by 1% the demand increases by 2%

b- if income increases by 1% demand deceases by 2%

If income increases by 2% demand decreases by 1%

Solution

Answer is a. If income increases by 1% the demand increases by 2%.

Explanation:

Income elasticity is 2 (positive) i.e. having a positive relationship between income and demand.

Moreover, Income elasticity of demand = % change in demand/ % change in income

Therefore, if income increases by 1%, the % increase in demand is 2%.