The less important the good in everyday consumption and the less percentage of budget is spent on the good:
A)the greater will be the price elasticity of the good.
B)the greater will be the effect of the price increase on the decrease in the demand.
C)the smaller will be the price elasticity of the good.
D)the smaller will be the effect of the price increase on the increase in the demand.

Question

Quizplus · Accepted Answer

Goods that are less important in everyday consumption and take up a smaller percentage of the budget tend to have lower price elasticity because consumers are less sensitive to price changes for these goods.

The Less Important the Good in Everyday Consumption and the Less