Answer:
-4.2
Explanation:
The income elasticity of demand determines the change in quantity demanded of a product due to change in income
The income elasticity of demand is calculate by:
Change in quantity demanded / change in price
(40 - 10) / [(40+10) / 2] / ($30,000 - $40,000) / [($30,000 + $40,000) / 2]
= (30 / 25) / ($10,000 / $35,000)
1.2 / 285.7 = -4.2