- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 2. Elasticities of Demand
CFA Practice Question
Income elasticity is +2 and income increases by 20%. Sales were 5000 units. What will they be now?
A. 3000
B. 5500
C. 7000
Explanation: A percentage increase in income will lead to an increase in quantity demanded that is twice as great; this means sales will increase by 40%, to 7000 units.
User Contributed Comments 0
You need to log in first to add your comment.