An Income Elasticity of Demand for Milk of 0

question 95

Multiple Choice

An income elasticity of demand for milk of 0.1 could mean that:

• A)as income rises by 10 percent, quantity demanded rises by 1 percent.
• B)as income rises by 100 percent, quantity demanded rises by 1 percent.
• C)as income rises by 20 percent, quantity demanded rises by 10 percent.
• D)as income rises by 50 percent, quantity demanded rises by 25 percent.

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Definitions:

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers as an incentive or for bulk purchases, not recorded separately in financial books.

Catalog List Price

The advertised price of a product or service in a catalog, before any discounts or promotions.

Cost of Inventory Sold

The total cost of goods sold during a specific period, including the cost of acquiring or manufacturing the goods.

Sales

The transactions involved in selling goods or services to customers, generating revenue for a business.