The correct answer is: B. More than One.
The elasticity of demand for a good is a measure of how responsive consumers are to changes in the price of that good. A good with an elasticity of demand greater than one is said to be elastic, meaning that consumers are very responsive to changes in price. A good with an elasticity of demand less than one is said to be inelastic, meaning that consumers are not very responsive to changes in price. A good with an elasticity of demand equal to one is said to be unitary elastic, meaning that consumers are perfectly responsive to changes in price.
Luxury goods are goods that are not essential to consumers and that consumers are willing to pay a high price for. Because luxury goods are not essential, consumers are likely to be very responsive to changes in price. If the price of a luxury good goes up, consumers are likely to buy less of it. If the price of a luxury good goes down, consumers are likely to buy more of it. This means that the elasticity of demand for luxury goods is likely to be greater than one.
Here is a brief explanation of each option:
- Option A: Infinite. This option is incorrect because the elasticity of demand cannot be infinite. The elasticity of demand measures the responsiveness of consumers to changes in price, and it is impossible for consumers to be infinitely responsive to changes in price.
- Option B: More than One. This option is correct because the elasticity of demand for luxury goods is likely to be greater than one. Luxury goods are not essential to consumers, and consumers are likely to be very responsive to changes in price.
- Option C: Less than One. This option is incorrect because the elasticity of demand for luxury goods is likely to be greater than one. Luxury goods are not essential to consumers, and consumers are likely to be very responsive to changes in price.
- Option D: Equal to One. This option is incorrect because the elasticity of demand for luxury goods is likely to be greater than one. Luxury goods are not essential to consumers, and consumers are likely to be very responsive to changes in price.