The absolute price elasticity of demand for a product for which annual expenditures make up a very small share of a typical consumer's budget is probably
A) less than 1.
B) equal to 1.
C) greater than 1.
D) infinity.

Question

Quizplus · Accepted Answer

When a product's annual expenditure makes up a small share of a typical consumer's budget, the consumer is less likely to reduce their demand for the product even if there is a small increase in its price. This means that demand is relatively inelastic, and the absolute price elasticity of demand is less than 1.

The Absolute Price Elasticity of Demand for a Product for Which