All other things constant, goods will have more __________ demand if their price uses up a __________ proportion of a consumer's budget.
A)price-elastic; greater
B)unit-elastic; smaller
C)price-elastic; smaller
D)price-inelastic; greater
E)stable; greater

Question

Quizplus · Accepted Answer

Goods will have more price-elastic demand if their price uses up a greater proportion of a consumer's budget because consumers are more sensitive to price changes when the good represents a larger part of their spending.

All Other Things Constant, Goods Will Have More __________ Demand