How does the share of a consumer's budget allocated to a product affect its price elasticity of demand?

• A. Products that take up a smaller share of the budget tend to have more elastic demand.
• B. The budget share has no impact on elasticity.
• C. Products that take up a larger share of the budget tend to have more elastic demand.
• D. Products with a larger budget share have perfectly inelastic demand.

Answer: (C)