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WAEC Economics 2012 Question 7

Question 7

Elasticity

Where a commodity takes an insignificant proportion of the consumer's income, demand for it will be

  1. A.unitary elastic.
  2. B.price inelastic.
  3. C.fairly elastic.
  4. D.income inelastic.
Show the answer and explanation

Answer: B (price inelastic.)

Explanation

When a good costs very little of one's income (e.g. salt, matches), price changes hardly affect how much is bought.