Whether a good is a luxury or necessity depends on
A) the price of the good.
B) the preferences of the buyer.
C) the intrinsic properties of the good.
D) how scarce the good is.

Question

Quizplus · Accepted Answer

Whether a good is a luxury or necessity is ultimately determined by the preferences of the buyer. Some people may consider a certain good to be a luxury item while others may view it as a necessity. For example, a luxury car may be seen as a necessity for someone who has a high-status job, but for someone else, it may be considered an unnecessary expense. The price, intrinsic properties, and scarcity of the good can all play a role in determining its value, but ultimately it is the preferences of the individual that determine whether it is a luxury or necessity.

Whether a Good Is a Luxury or Necessity Depends on