Asked by saurav basnet on Jul 07, 2024
Verified
Demand is more elastic for an item which represents a relatively large part of a person's total budget.
Elastic Demand
A situation where the quantity demanded of a good or service significantly changes in response to a change in its price.
Total Budget
The overall amount of money allocated for a specific purpose or period.
Large Part
A phrase indicating a significant portion or majority of a whole.
- Gain insight into the idea of price elasticity of demand and the approach to its calculation.
Verified Answer
FO
Franca OchubaJul 14, 2024
Final Answer :
True
Explanation :
When an item represents a relatively large part of a person's total budget, consumers are more sensitive to price changes, making the demand for that item more elastic.
Learning Objectives
- Gain insight into the idea of price elasticity of demand and the approach to its calculation.