The greater the percentage of the budget spent on a good, the
A) higher its elasticity of demand.
B) lower is its elasticity of demand.
C) less responsive is quantity demanded to a change in price.
D) greater its inelasticity of demand.

Question

Quizplus · Accepted Answer

When a larger percentage of the budget is spent on a good, consumers are more sensitive to price changes, leading to higher elasticity of demand.

The Greater the Percentage of the Budget Spent on a Good