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    Question

    Which of the following is true for income elasticity of

    demand? (1) It measures the responsiveness of quantity demanded of a good with respect to consumers' income (2) It is calculated by dividing percentage change in quantity demanded by percentage change in consumer income
    A Neither Correct Answer Incorrect Answer
    B Only 2 Correct Answer Incorrect Answer
    C Both 1 and 2 Correct Answer Incorrect Answer
    D Only 1 Correct Answer Incorrect Answer

    Solution

    The correct answer is C

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