A 10 percent increase in the cost of restaurant meals, which are a luxury, will most likely
A)increase the purchase of meals by 10 percent.
B)increase the purchase of meals by less than 10 percent.
C)decrease the purchase of meals by more than 10 percent.
D)decrease the purchase of meals by less than 10 percent.

Question

Quizplus · Accepted Answer

Luxury goods tend to have elastic demand, meaning a price increase will lead to a proportionally larger decrease in quantity demanded.

A 10 Percent Increase in the Cost of Restaurant Meals