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For a good that is a luxury:
 
(i) demand tends to be inelastic.
(ii) quantity demanded tends to respond substantially to a change in price.
(iii) the law of demand often does not apply.
(iv) demand cannot be represented by a demand curve in the usual way.
(v) all of the above are correct. 

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Nestor Rutherford
Nestor RutherfordLv2
31 Jan 2020

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Related questions

For a good that is a luxury, demand

A. tends to be inelastic

B. tends to be elastic.

C. has unit elasticity.

D. cannot be represented by a demand curve in the usual way.

A perfectly elastic demand implies that:
 
(i) any rise in price above that represented by the demand curve will result in a quantity demanded of zero.
(ii) buyers will not respond to any change in price.
(iii) quantity demanded and price change by the same percent as we move along the demand curve.
(iv) the price will rise by an infinite amount when there is a change in quantity demanded.

1. The concept of price elasticity of demand measures:

a. the slope of the demand curve.

b. the number of buyers in a market.

c. the extent to which the demand curve shifts as the result of a price decline.

d. the sensitiveness of quantities demanded to price changes.

2. When the percentage change in price is less than the resulting percentage change in quantity demanded:

a. demand is elastic.

b. demand is inelastic.

c. demand is unit elastic.

d. none of the above.

3. The elasticity of demand:

a. will be the same at each price-quantity combination on a stable demand curve.

b. tends to be elastic in high-price ranges and inelastic in low-price ranges.

c. tends to be inelastic in high-price ranges and elastic in low-price ranges.

d. is infinitely large for a perfectly inelastic demand curve.

4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.

5. Total revenue rises as the price of a good increases if price elasticity of demand is:

a. unitary elastic

b. perfectly inelastic.

6. The demand for such products as salt, bread, and electricity tend to be:

a. relatively price elastic.

b. relatively price inelastic.

c. of unit price elasticity.

d. perfectly price elastic.

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