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true or false: ​If a product constitutes a large portion of a consumer's income, demand will...

true or false: ​If a product constitutes a large portion of a consumer's income, demand will be more inelastic.
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Answer #1

This is a FALSE STATEMENT.

When the consumer spent a larger percentage of his income on good, the demand for that good will be more elastic.

Since the consumer is spending a larger proportion on a product, he will be more sensitive to a change in the price of that product. A small change in the price of those goods will lead to a larger percentage change in the quantity demanded.

Those demand for those goods which takes a small percentage of our income doesn’t changes more to the change in the price, having inelastic demand.

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