For which of the following goods is the income elasticity of demand likely highest?
A)tennis lessons
B)allergy medication
C)clothing
D)cell phone contracts

Question

Quizplus · Accepted Answer

Luxury goods or services tend to have higher income elasticity of demand, and tennis lessons can be considered a luxury service. As people get wealthier, they are more likely to be interested in investing in hobbies and leisure activities such as tennis lessons, so demand for this service will increase with income.

For Which of the Following Goods Is the Income Elasticity