For a particular good,a 2 percent increase in price causes a 12 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?
A)There are no close substitutes for this good.
B)The good is a luxury.
C)The market for the good is broadly defined.
D)The relevant time horizon is short.

Question

Quizplus · Accepted Answer

The good is a luxury because the demand is highly elastic, as indicated by the large decrease in quantity demanded in response to a small increase in price. Luxuries tend to have more elastic demand.

For a Particular Good,a 2 Percent Increase in Price Causes