Other things constant, the price elasticity of demand for a product will tend to be smaller (more inelastic) if
A) people spend a large share of their income on the product.
B) people spend an insignificant share of their income on the product.
C) the population in the market area is large.
D) there are many good substitutes for the product.

Question

Quizplus · Accepted Answer

When people spend an insignificant share of their income on a product, they are less sensitive to price changes, making the demand more inelastic.

Other Things Constant, the Price Elasticity of Demand for a Product