Other things being equal, demand is more elastic if
A) the good is less expensive the good.
B) the time period for adjustment is shorter.
C) a family spends a larger percentage of its budget on the good.
D) the good is more unique.

Question

Quizplus · Accepted Answer

When a family spends a larger percentage of its budget on a good, it means that the good is more essential to them and they have to make adjustments to their budget when the price of the good changes. Therefore, they are more price-sensitive and demand is more elastic.

Other Things Being Equal, Demand Is More Elastic If