Necessities tend to be price inelastic, whereas luxuries tend to be price elastic.

Question

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Necessities such as food, clothing, and shelter are often essential for survival and therefore people will continue to purchase them even if the price increases. Luxuries, on the other hand, are not essential for survival and consumers are more likely to cut back their spending on luxury goods if the price increases. This makes luxuries more price elastic than necessities.

Necessities Tend to Be Price Inelastic, Whereas Luxuries Tend to Be