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Question
Assume that a family spends 35 percent of its income on housing, 20 percent on travel-related expenses, 10 percent on utilities, 25 percent on health care, and 5 percent on miscellaneous items. Demand for which category will be most responsive to a change in price?
a. miscellaneous
b. health care
c. utilities
d. travel-related expenses
e. housing
Answer
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