Which of the following would you expect to have the lowest income elasticity of demand?
A)a dinner at an expensive restaurant
B)a ticket to a music festival
C)a mobile phone
D)a private jet

Question

Quizplus · Accepted Answer

A mobile phone is a necessity in today's world and its demand is relatively unaffected by changes in income, hence it will have the lowest income elasticity of demand. On the other hand, luxury items like dinner at an expensive restaurant or a private jet are more likely to have a higher income elasticity of demand, meaning that their demand will be more responsive to changes in income.

Which of the Following Would You Expect to Have the Lowest