Suppose a consumer’s income increases from $30,000 to $36,000. As a re
Suppose a consumer’s income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer’s income elasticity of demand for CDs?
A) 0.5
B) 1.0
C) 1.5
D) 2.0
ANSWER
B
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