Ferrari and Lamborghini are manufacturers of very expensive automobiles.Their limited edition cars often sell for $300,000 or more.For most consumers,these are prestige products,and demand is likely to be
A) cross-price elastic.
B) price inelastic.
C) price elastic.
D) status quo elastic.
E) derived demand inelastic.

Question

Quizplus · Accepted Answer

As these cars are considered prestige products, their demand is likely to be price inelastic. This means that even if the price increases, the demand for these cars is not likely to decrease significantly as consumers are willing to pay a premium for these luxury products.

Ferrari and Lamborghini Are Manufacturers of Very Expensive Automobiles