If a 5 percent increase in price causes a 15 percent decrease in quantity demanded,what might be said about this product
A)It has no close substitute.
B)It might be a luxury.
C)It might be part of a broadly defined market.
D)It might be in a short time horizon.

Question

Quizplus · Accepted Answer

The relatively large decrease in quantity demanded in response to a relatively small increase in price suggests that the product is not a necessity, but rather a luxury item.

If a 5 Percent Increase in Price Causes a 15