Suppose your annual income is $65,000 and you pay $30 a year for your favourite magazine.Your demand for the magazine is likely to be
A)perfectly elastic.
B)inelastic.
C)unit elastic.
D)elastic.
E)elastic - the same as your demand for all other goods.

Question

Quizplus · Accepted Answer

The demand for the magazine is likely inelastic because the cost of the magazine is a very small portion of your annual income, implying that changes in the price of the magazine are unlikely to significantly affect your decision to purchase it.

Suppose Your Annual Income Is $65,000 and You Pay $30