Regarding the price elasticities of demand, which of the following statements is true?
A)Price elasticities vary considerably from product to product.
B)Luxurious goods are generally less price elastic.
C)Necessities are generally more price elastic.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

Price elasticities indeed vary significantly from product to product, reflecting how sensitive the quantity demanded is to a change in price. Luxurious goods tend to be more price elastic because consumers can more easily forego or find alternatives to these goods when prices rise, contrary to what option B suggests. Necessities, on the other hand, are generally less price elastic because consumers continue to buy them even when prices increase, which contradicts option C.

Regarding the Price Elasticities of Demand, Which of the Following