The income elasticity of demand for caviar tends to be
A)high because caviar is relatively expensive.
B)low because caviar is packaged in small containers.
C)high because buyers generally feel that they can do without it.
D)low because it is almost always in short supply.

Question

Quizplus · Accepted Answer

Caviar is considered a luxury good, and luxury goods typically have high income elasticity of demand because consumers are more likely to purchase them as their income increases.

The Income Elasticity of Demand for Caviar Tends to Be