If a consumer is spending a large portion of his or her income on a good, then the demand for the good is inelastic.

Question

Quizplus · Accepted Answer

The proportion of income spent on a good does not directly determine its price elasticity of demand. Elasticity is more about how much the quantity demanded changes in response to price changes. Goods can be essential (inelastic demand) or non-essential (elastic demand) regardless of the income proportion spent on them.

If a Consumer Is Spending a Large Portion of His