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

-Since an expensive sports car constitutes a greater portion of a consumer's budget than does laundry soap, the price elasticity of demand for an expensive sports car is _____.
A)relatively less elastic
B)unit-elastic
C)perfectly inelastic
D)relatively more elastic
E)perfectly elastic

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Since an expensive sports car constitutes a greater portion of a consumer's budget than does laundry soap, the price elasticity of demand for an expensive sports car is _____.
A)relatively less elastic 
B)unit-elastic 
C)perfectly inelastic 
D)relatively more elastic 
E)perfectly elastic

Quizplus · Accepted Answer

The price elasticity of demand for an expensive sports car is relatively more elastic because consumers are more sensitive to price changes when it comes to high-cost items that constitute a larger portion of their budget, compared to low-cost, everyday items like laundry soap.

The Figure Given Below Shows the Demand Curves for Five