Suppose Empirical Analysis Concludes That the Income Elasticity of Demand

Multiple Choice

Suppose empirical analysis concludes that the income elasticity of demand for Kraft Dinner (KD) is -0.2.The interpretation of this result is that

A) a 10% increase in income will lead to a 2% decrease in quantity demanded of KD.
B) a 10% increase in income will lead to a 20% decrease in quantity demanded of KD.
C) a 10% increase in income will lead to a 0.2% decrease in quantity demanded of KD.
D) a 10% increase in income will lead to a 2% increase in quantity demanded of KD.
E) a 10% increase in income will lead to a 20% increase in quantity demanded of KD.