The demand for a luxury good such as a designer handbag tends to be:
A) unit elastic.
B) elastic.
C) inelastic.
D) vertical.

Question

Quizplus · Accepted Answer

Luxury goods like designer handbags typically have elastic demand because consumers are more sensitive to price changes. When the price increases, demand decreases significantly, and vice versa, as these items are not necessities and consumers can easily forego purchasing them or switch to cheaper alternatives.

The Demand for a Luxury Good Such as a Designer