The Demand for Answering Machines Is Q = 1,000 -

question 41

Multiple Choice

The demand for answering machines is Q = 1,000 - 150P + 25I.Assume that per capita disposable income I is $200.When the price of answering machines is P = $10,the income elasticity of demand is:

• A) 2.5.
• B) 0.11.
• C) 1.0.
• D) 25.
• E) 1.11.