Which of the following could explain why the demand for table salt is inelastic?
A)Salt is a luxury good.
B)Salt is a rare commodity.
C)Households devote a very small portion of their income to salt purchases.
D)Salt is a luxury for high-income consumers but a necessity for low-income consumers.

Question

Quizplus · Accepted Answer

When households devote a small portion of their income to a particular good or service, it means that changes in the price of that good or service have little impact on the overall demand. In this case, even if the price of salt were to increase, most households would still continue to purchase it at similar levels because the cost of salt is a very small part of their overall budget. Therefore, the demand for table salt is inelastic.

Which of the Following Could Explain Why the Demand for Table