Luxury items tend to have ________ demand, and necessities tend to have ________ demand.
A) relatively elastic; inelastic
B) relatively inelastic; elastic
C) perfectly elastic; perfectly inelastic
D) unit elastic; perfectly inelastic

Question

Quizplus · Accepted Answer

Luxury items have relatively elastic demand because consumers are more sensitive to price changes, meaning they will buy significantly less if the price increases. Necessities have inelastic demand because consumers will continue to buy them even if the price increases, as these items are essential for daily life.

Luxury Items Tend to Have ________ Demand, and Necessities Tend