Vernon spends the following percentages of his budget on the following goods: 23 percent on good A, 11 percent on good B, 1 percent on good C, and 3 percent on good D. For which good is price elasticity of demand the highest, ceteris paribus? a. good A.

b. good B.

c. good C.

d. good D.

Question

Business

Valentina Moran

3 January, 23:36

Vernon spends the following percentages of his budget on the following goods: 23 percent on good A, 11 percent on good B, 1 percent on good C, and 3 percent on good D. For which good is price elasticity of demand the highest, ceteris paribus? a. good A.

b. good B.

c. good C.

d. good D.

+2

Answers (1)

Know the Answer?

Rex Mann · Answer 1

A) good A.

Explanation:

Good A represents the highest percentage of Vernon's budget, so naturally any price change related to good A will affect Vernon greatly and may cause him to change the quantity purchased of that good. Even the price of substitutes or complements of that good will have a large impact in Vernon's purchase decisions.

Vernon spends the following percentages of his budget on the following goods: 23 percent on good A, 11 percent on good B, 1 percent on good C, and 3 percent on good D. For which good is price elasticity of demand the highest, ceteris paribus? a. good A.b. good B.c. good C.d. good D.

Vernon spends the following percentages of his budget on the following goods: 23 percent on good A, 11 percent on good B, 1 percent on good C, and 3 percent on good D. For which good is price elasticity of demand the highest, ceteris paribus? a. good A.

b. good B.

c. good C.

d. good D.