The larger the proportion of a consumer's budget that is spent on a product,the more the consumer will be affected by a change in the price of the product.

Question

Quizplus · Accepted Answer

This statement is true. If a larger proportion of a consumer's budget is spent on a product, it means that the consumer is more dependent on that product and any change in the price of the product will have a greater impact on their overall budget. Therefore, they will be more affected by a change in price compared to a product they spend a smaller proportion of their budget on.

The Larger the Proportion of a Consumer's Budget That Is