Answer to Question #140580 in Microeconomics for Crystal Jane Perales

Question

Why luxury products tend to have greater elasticity?

Answer 1

$$Solution$$

 Luxury goods have a high elasticity of demand because they are sensitive to price changes. When a good or service is a luxury or a comfort good, it is highly elastic when compared to a mandatory good. An important product, such as food, is typically inelastic since consumers still purchase food even if the price increases.