Question

24) Business people speak about income elasticity of demand without using the actual term. Which one of the following statements reflects income elasticity of demand? A) "I don't think a price cut will make any difference to my bottom line. What I may gain from selling more I would lose on the lower price." B) "My customers are real bargain hunters. Since I set my prices just a few cents below my competitors, customers have flocked to the store and sales are booming." C) "With the recent economic recovery, people have more income to spend and sales are booming, even at the previous prices." D) "A price cut won't help me. It won't increase sales, and I'll just get less money for each unit." E) both A and B