Food and clothing tend to have:
A)small income elasticities because consumers, regardless of their incomes, choose to buy these goods
B)small income elasticities because consumers will buy proportionately more at higher income levels than they will at low income levels
C)large income elasticities because they are necessities
D)large income elasticities because they are relatively cheap

Question

Quizplus · Accepted Answer

Food and clothing are considered basic necessities that people tend to buy regardless of their income levels. Therefore, the demand for these goods is relatively stable, resulting in small income elasticities.

Food and Clothing Tend to Have