If a good only takes up a small proportion of your income,the elasticity of demand is likely to be:
A)relatively elastic.
B)relatively inelastic.
C)perfectly elastic.
D)unit elastic.
E)equal to one.

Question

Quizplus · Accepted Answer

When a good takes up a small proportion of income, consumers are less sensitive to changes in price and are more likely to continue purchasing the good even if the price increases. This means that the demand is relatively inelastic.

If a Good Only Takes Up a Small Proportion of Your