Suppose your annual income is $65 000 and your favourite TV Guide magazine costs you $28 a year.Your demand for the TV Guide magazine is likely to be
A)perfectly elastic.
B)inelastic.
C)unit elastic.
D)elastic.
E)elastic -- the same as your demand for all other goods.

Question

Quizplus · Accepted Answer

The cost of the TV Guide magazine is a very small portion of your annual income, making your demand for it relatively inelastic. Changes in price are unlikely to significantly affect your decision to purchase it.

Suppose Your Annual Income Is $65 000 and Your Favourite