The demand for a good is less price elastic
A) if closer substitutes are available.
B) if the good is a luxury rather than a necessity.
C) if the share of the good in the average consumer's budget is smaller.
D) in the long run than in the short run.

Question

Quizplus · Accepted Answer

When the share of a good in the average consumer's budget is smaller, consumers are less sensitive to price changes, making demand less price elastic.

The Demand for a Good Is Less Price Elastic