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

Question

Quizplus · Accepted Answer

The portion 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 that are necessities tend to have inelastic demand regardless of the income portion spent on them, while non-essential goods often have elastic demand.

If a Consumer Is Spending a Large Portion of His