Compare the demand for pepperpepper with demand for gasolinegasoline. The demand for pepperpepper is likely

A. more elastic because pepper tendspepper tends to be purchased in larger quantities.

B. more elastic because pepper tendspepper tends to represent a smaller fraction of a consumer's budget.

C. more inelastic because pepper tendspepper tends to be purchased more frequently.

D. more inelastic because pepper tendspepper tends to represent a smaller fraction of a consumer's budget.

E. more elastic because pepper tendspepper tends to represent a larger fraction of a consumer's budget.

Question

Business

Alivia Pace

11 July, 10:10

Compare the demand for pepperpepper with demand for gasolinegasoline. The demand for pepperpepper is likely

A. more elastic because pepper tendspepper tends to be purchased in larger quantities.

B. more elastic because pepper tendspepper tends to represent a smaller fraction of a consumer's budget.

C. more inelastic because pepper tendspepper tends to be purchased more frequently.

D. more inelastic because pepper tendspepper tends to represent a smaller fraction of a consumer's budget.

E. more elastic because pepper tendspepper tends to represent a larger fraction of a consumer's budget.

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Answers (1)

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Ibrahim Stuart · Answer 1

The correct answer is option D.

Explanation:

The demand for pepper will be relatively inelastic than the demand for gasoline. This is because pepper represents a smaller share in the consumer's budget. So a change in the price of pepper will not have a significant impact on consumer's budget. This will make its relatively inelastic to change in price.

Gasoline represents a major share of the budget so its demand will be more price elastic.