The Difference Between Price Elasticity of Demand and Income Elasticity

question 311

Multiple Choice

The difference between price elasticity of demand and income elasticity of demand is that

• A) income elasticity of demand examines how an individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes.
• B) income elasticity refers to the movement along the demand curve while price elasticity refers to a horizontal shift of the demand curve.
• C) income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price.
• D) income elasticity refers to a horizontal shift of the demand curve while price elasticity of demand refers to a movement along the demand curve.