Economics Elasticity Of Demand Questions
The concept of price elasticity of demand for luxury goods refers to the responsiveness or sensitivity of the quantity demanded of luxury goods to changes in their price. It measures the percentage change in quantity demanded divided by the percentage change in price. Luxury goods typically have a high price elasticity of demand, meaning that a small change in price leads to a relatively larger change in quantity demanded. This is because luxury goods are often considered non-essential or discretionary items, and consumers are more likely to reduce their demand for luxury goods when their prices increase.