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Author Question: Studies show that the income elasticity of demand for wine is approximately five. What does this mean? (Read 127 times)

TFauchery

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Studies show that the income elasticity of demand for wine is approximately five. What does this mean?


A 1 percent increase in income leads to a 5 percent increase in wine consumption.


Wine is a relatively elastic good.


A 5 percent increase in income leads to a 1 percent increase in wine consumption.


A 1 percent decrease in the price of wine leads to a 5 percent increase in wine consumption.



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Marked as best answer by TFauchery on Oct 5, 2019

ApricotDream

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