The cost of basics like milk, bread, potatoes and bananas has jumped in the past year, forcing families to nix luxuries, steer away from organic goods and buy more house brands. What does customer Elize Joseph mean when she said, "You can cut back on buying clothes and shoes, but you can't do that with food; you have to eat"?
A) The price elasticity of demand for food is higher than for clothes.
B) The price elasticity of demand for food is lower than for clothes.
C) Income elasticity of demand for food is positive.
D) Income elasticity of demand for food is negative.

Question

Quizplus · Accepted Answer

The statement implies that food is a necessity with inelastic demand, meaning people cannot easily reduce their consumption despite price increases, unlike clothes, which are more elastic.

The Cost of Basics Like Milk, Bread, Potatoes and Bananas