Luxury goods have an income elasticity ________.
A) less than zero
B) between zero and one
C) equal to one
D) greater than one

Question

Quizplus · Accepted Answer

Luxury goods have an income elasticity greater than one, indicating that as income increases, the demand for luxury goods increases at a faster rate. This is because luxury goods are seen as high-end products and are often associated with status, so as income increases, people are willing to spend more on luxury goods to showcase their status.

Luxury Goods Have an Income Elasticity ________