Demand for a luxury item, such as a yacht, is likely to be
A) both income and price inelastic.
B) both income elastic and price elastic.
C) income elastic and price inelastic.
D) income inelastic and price elastic.

Question

Quizplus · Accepted Answer

Luxury items like yachts are typically income elastic, meaning demand increases significantly with income. They are also price elastic, as changes in price can significantly affect demand.

Demand for a Luxury Item, Such as a Yacht, Is