Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
A) people spend a large share of their income on the product.
B) people spend an insignificant share of their income on the product.
C) the population in the market area is large.
D) there are many good substitutes for the product.

Question

Quizplus · Accepted Answer

The price elasticity of demand tends to be smaller (more inelastic) for products that represent an insignificant share of consumers' income because consumers are less sensitive to price changes when the amount they spend on a product is relatively small.

Other Things Constant, the Price Elasticity of Demand for a Product