You spend 45% of your budget on housing, 30% on food, and 25% on entertainment. based only on this information, which would you expect to have the most inelastic demand?

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Rowe

14 May, 22:24

You spend 45% of your budget on housing, 30% on food, and 25% on entertainment. based only on this information, which would you expect to have the most inelastic demand?

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Barbara Molina · Answer 1

Inelastic demand is those demands that the quantity does not change regardless if the price changed. This is also called insensitive demand. In the problem, the inelastic demand is the "45% of the budget which goes to housing" while the others are considered elastic demand.