A. The price of the commodity
B. Availability of factors of production
C. The prices of factors of production
D. Income of the consumers
Correct Answer:
Option D – Income of the consumers
Explanation
The Proportion of Consumer’s Income Spent: Another important determinant of the elasticity of demand is how much it accounts for in consumer’s budget. In other words, the proportion of consumer’s income spent on a particular commodity also influences the elasticity of demand for it. The greater the proportion of income spent on a commodity, the greater will be generally its elasticity of demand, and vice versa.
