The income elasticity of demand is largest for
A) shelter.
B) clothing.
C) luxuries.
D) food.

Name: The income elasticity of demand is largest for A) shelter. B) clothing. C) luxuries. D) food.
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Question

Quizplus · Accepted Answer

The income elasticity of demand is largest for luxuries because as people's income increases, they tend to spend a proportionally higher amount of their income on luxury items compared to necessities like food, shelter, or clothing.

The Income Elasticity of Demand Is Largest for