Necessities such as food and clothing tend to have
A)high price elasticities of demand and high income elasticities of demand.
B)high price elasticities of demand and low income elasticities of demand.
C)low price elasticities of demand and high income elasticities of demand.
D)low price elasticities of demand and low income elasticities of demand.

Question

Quizplus · Accepted Answer

Necessities such as food and clothing are essential for survival, so consumers are willing to pay for them even if their prices increase. This implies that the demand is insensitive to price changes, leading to a low price elasticity of demand. Additionally, these goods are typically purchased regardless of income level, implying that income has little effect on the quantity demanded, resulting in a low income elasticity of demand.

Necessities Such as Food and Clothing Tend to Have