The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-Demand for a good becomes more elastic as:
A)the number of substitutes available declines.
B)the time period under consideration becomes shorter.
C)a good makes up a larger percentage of a consumer's budget.
D)a good makes up a smaller percentage of a consumer's budget.
E)the producer has more time to respond to price changes.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Demand for a good becomes more elastic as:
A)the number of substitutes available declines. 
B)the time period under consideration becomes shorter. 
C)a good makes up a larger percentage of a consumer's budget. 
D)a good makes up a smaller percentage of a consumer's budget. 
E)the producer has more time to respond to price changes.

Quizplus · Accepted Answer

Demand for a good becomes more elastic when it constitutes a larger portion of a consumer's budget because consumers are more sensitive to price changes for such goods, affecting their purchasing decisions significantly.

The Figure Given Below Shows the Demand Curves for Five