Luxury goods tend to have income elasticities of demand that are
A)greater than 1.
B)greater than zero but less than 1.
C)less than the income elasticities of demand for necessary goods.
D)negative.
E)first positive and then negative as income increases.

Question

Quizplus · Accepted Answer

Luxury goods have income elasticities of demand that are greater than 1, meaning that as income increases, the demand for these goods increases at a proportionally faster rate.

Luxury Goods Tend to Have Income Elasticities of Demand That