Income Elasticity of Demand is defined as?

Income Elasticity of Demand measures how the quantity demanded of a good responds to changes in consumer income. Specifically, it is calculated as the percentage change in the quantity demanded divided by the percentage change in income. This concept is crucial for understanding how demand shifts as consumers experience changes in their financial circumstances.

When income increases, consumers may buy more of certain goods, especially luxury items or normal goods, while they might purchase less of inferior goods. A positive elasticity indicates that the good is a normal good, and demand increases as income rises, while a negative value would indicate it's an inferior good. This understanding of consumer behavior in relation to income changes allows businesses and policymakers to make informed decisions regarding pricing, production, and economic strategies.

The other options relate to different concepts in economics; for instance, responsiveness to changes in price pertains to price elasticity of demand, while consumer satisfaction relates to utility, and total income from sales is connected to revenue calculations.