Which of the following is true of a good for which the demand is elastic?
A)The price change of the good persists over a longer time period.
B)The price change of the good does not persist over a longer time period.
C)The amount of income spent on the good is a small proportion of a consumer's budget.
D)The good does not have close substitutes in the market.
E)The good does not have complements in the market.

Question

Quizplus · Accepted Answer

When the demand for a good is elastic, a change in price will cause a significant change in the quantity demanded. Consumers are more sensitive to price changes and will likely switch to a substitute or reduce consumption. This means that the price change will persist over a longer time period as consumers take time to adjust their buying habits.

Which of the Following Is True of a Good for Which