Demand for necessities is inelastic, while demand for luxuries is elastic.

Question

Quizplus · Accepted Answer

This statement is true as necessities are goods that are required for survival or basic needs such as food, shelter, and medicine. Therefore, consumers will continue to buy these items regardless of price changes, making the demand inelastic. On the other hand, luxuries are non-essential goods or services such as vacations, high-end gadgets, and high-end clothing, and the demand for these items is likely to decrease as prices increase, making the demand elastic.

Demand for Necessities Is Inelastic, While Demand for Luxuries Is