Since an expensive sports car constitutes a greater portion of the consumer's budget than does laundry soap,the elasticity of demand for an expensive sports car is _____.
A)relatively less elastic
B)a vertical line
C)a downward sloping straight line
D)relatively more elastic
E)not subject to elasticity because of the income level of the consumers who purchase expensive sports cars

Question

Quizplus · Accepted Answer

The elasticity of demand is higher for goods that take up a larger portion of a consumer's budget, like expensive sports cars, because consumers are more sensitive to price changes for such significant expenditures.

Since an Expensive Sports Car Constitutes a Greater Portion of the Consumer's