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.

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Definitions:

Rival Behaviour

Actions or strategies adopted by companies in competition with one another to gain an advantage or market share.

Competitive Effectiveness

The ability of an organization to implement strategies that secure a competitive edge and achieve desired outcomes efficiently.

Sustainable Competitive Advantage

The enduring ability of a company to remain more efficient, profitable, or innovative than its competitors.

Competitive Advantage

A distinctive feature or standpoint enabling a company to surpass its rivals in performance.