Compare the demand for sugar with demand for gasoline. The demand for sugar is likely A. more elastic because sugar tends to represent a smaller fraction of a consumer's budget. B. more inelastic because sugar tends to represent a smaller fraction of a consumer's budget. C. more elastic because sugar tends to be purchased in larger quantities. D. more elastic because sugar tends to represent a larger fraction of a consumer's budget. E. more inelastic because sugar tends to be purchased more frequently.

The demand for sugar is often considered more elastic because it represents a smaller fraction of a consumer’s overall budget. When prices for sugar increase, consumers can easily substitute it with alternatives, like honey or stevia, or reduce their sugar intake. This flexibility in consumer behavior typically leads to a more pronounced change in quantity demanded when prices fluctuate. On the flip side, gasoline usually exhibits more inelastic demand. For most individuals and businesses, gasoline is a necessary expense for transportation and daily activities, making consumers less sensitive to price changes. Even if prices rise, people still need to fuel their cars, which means they won’t significantly decrease their gasoline purchases, illustrating that essential goods often hold a more inelastic demand.