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22 March, 09:23

If the percentage change in quantity demanded of a good is less than the percentage change in buyer's income, then the good is said to be:

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  1. 22 March, 09:31
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    Answer: Income Inelastic.

    Explanation:

    Income elasticity of demand refers to the responsiveness of demand when there is a certain change in consumer's income.

    Income inelastic refers to the situation in which demand is less responsive to the change in consumer's income. Suppose that income decreases by 10%, then as a result demand decreases by 5%. Here, demand does not fall significantly with a fall in income.
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