Price elasticity is elastic when a large budget share heightens consumer sensitivity to price changes.

Steps:

• Recall price elasticity of demand measures percentage change in quantity demanded relative to percentage change in price; elastic if absolute value exceeds 1.
• Identify key determinants: proportion of income spent, time horizon, necessity status, and substitute availability.
• Evaluate options: large income share amplifies responsiveness as price hikes strain budgets more.
• Conclude A fits elastic condition based on economic theory.

Why A is correct:

• When a large percentage of income is spent on the product, consumers are highly sensitive to price changes, as even small increases significantly impact budgets, leading to elastic demand per standard elasticity factors.

Why the others are wrong:

• B: Short run typically yields inelastic demand due to limited adjustment time for consumers.
• C: Necessity products have inelastic demand because demand persists regardless of price.
• D: Few substitutes make demand inelastic, as consumers have limited alternatives.

Final answer: A