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

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

Answer: (B)