-Refer to Figure 5 -5. The data in the diagram indicates that DVDs
A) are necessities.
B) are luxury goods.
C) are both luxury goods and price inelastic goods.
D) are both necessities and price inelastic goods.
E) are price inelastic goods.

Question

-Refer to Figure 5 -5. The data in the diagram indicates that DVDs
A) are necessities. 
B) are luxury goods. 
C) are both luxury goods and price inelastic goods. 
D) are both necessities and price inelastic goods. 
E) are price inelastic goods.

Quizplus · Accepted Answer

Luxury goods are those for which demand increases more than proportionally as income rises, which is indicated by the data for DVDs in the diagram.