Which one of the following generalizations is NOT correct?
A) The demand for luxury goods is relatively elastic.
B) The demand for necessities is relatively elastic.
C) The greater the availability of substitutes,the higher the price elasticity of demand.
D) The higher the price of an item is as compared to a consumer's income the higher the elasticity of demanD.

Question

Quizplus · Accepted Answer

The demand for necessities is generally considered to be relatively inelastic, as consumers will continue to purchase these goods even if the price rises.

Which One of the Following Generalizations Is NOT Correct