[amp_mcq option1=”Unit Elastic” option2=”Highly-Elastic” option3=”Fairly Elastic” option4=”Zero Elastic” correct=”option2″]<\/p>\n
The correct answer is: B. Highly-Elastic<\/strong><\/p>\n The demand for luxury items is highly elastic, meaning that a small change in price will lead to a large change in demand. This is because luxury items are not essential goods, and consumers are more likely to substitute them for other goods if the price goes up. For example, if the price of a high-end sofa goes up by 10%, consumers may be more likely to buy a lower-end sofa or even forgo buying a sofa altogether.<\/p>\n Option A, unit elastic, is incorrect because it means that the demand for a good is not affected by changes in price. This is not the case for luxury items, as consumers are more likely to substitute them for other goods if the price goes up.<\/p>\n Option C, fairly elastic, is incorrect because it means that the demand for a good is somewhat affected by changes in price. This is also not the case for luxury items, as consumers are more likely to substitute them for other goods if the price goes up.<\/p>\n Option D, zero elastic, is incorrect because it means that the demand for a good is not affected by changes in price at all. This is not the case for luxury items, as consumers are more likely to substitute them for other goods if the price goes up.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Unit Elastic” option2=”Highly-Elastic” option3=”Fairly Elastic” option4=”Zero Elastic” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-45425","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n