Question : Whats is elasticty of luxury goods demand?
Option 1: Inelastic
Option 2: Elastic
Option 3: Highly elastic
Option 4: Perfectly Inelastic
Answer (1)
7th Jan, 2024
Correct Answer: Highly elastic
Solution :
Luxury goods have high degree of elasticity.
Because the commodities are not necessities, the percentage change in demand is greater than the percentage change in price, making them overly sensitive to price changes.
Hence option C will be the correct answer.
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