how-does-the-share-of-a-consumers-budget-spent-on-a-good-affect-its-price-elasti

Question

How does the share of a consumer's budget spent on a good affect its price elasticity of demand?

Accepted Answer

Goods that take up a larger share of the budget tend to have more elastic demand.

Answer

The share of the budget has no effect on elasticity.

Answer

Goods that take up a smaller share of the budget tend to have more elastic demand.

Answer

Goods that take up a larger share of the budget tend to have perfectly inelastic demand.