Since an individual spends a small share of her income on salt, the elasticity of demand is likely to be low.

Question

Quizplus · Accepted Answer

The elasticity of demand is a measure of how responsive the demand for a good is to changes in its price. If an individual spends a small share of her income on a good, such as salt, it is likely that the demand for that good will be relatively unresponsive to changes in its price, meaning the demand will be inelastic. Therefore, the statement is true, and the answer is A.

Since an Individual Spends a Small Share of Her Income