What good is most likely to have an income elasticity of demand equal to 0.3?
A) medication
B) takeout dinner
C) used clothing
D) laptop
E) a download on iTunes

Question

Quizplus · Accepted Answer

Medication is an essential commodity and its demand is less sensitive to changes in income. Therefore, it is most likely to have an income elasticity of demand equal to 0.3, which indicates that a 1% increase in income will result in a 0.3% increase in demand for medication.

What Good Is Most Likely to Have an Income Elasticity