Answer:
500%
Explanation:
Given that,
Income elasticity of demand = 2.5
Consumer income increases from $100 to $300,
Therefore, percentage change in consumer income:
= [($300 - $100) ÷ $100] × 100
= [$200 ÷ $100] × 100
= 200%
Income elasticity of demand = (% change in Quantity demanded) ÷ (% change in income)
2.5 = (% change in Quantity demanded) ÷ 200%
Hence,
% change in Quantity demanded = 2.5 × 200%
= 500%
