Q. Proportion of Income Spent on a Commodity?
Another characteristic that has an impact on the elasticity of demand for a commodity is proportion of income that consumers use up on a specific commodity. If proportion of income spent on a commodity is very little, its demand would be less elastic and vice versa. Characteristic illustrations of such commodities arematches, sugar, and books, washing powder etc. that use a very tiny proportion of consumer's income. Demand for these goods is generally inelastic as a rise in price of such goods doesn't largely have an effect on consumer's consumption pattern and overall purchasing power. So people continue to purchase approximately the same quantity even at time their price rises.