What good is most likely to have an income elasticity of demand equal to 8?
A) a doctor's visit
B) toilet paper
C) used clothing
D) a five-star hotel
E) college coursework

Question

Quizplus · Accepted Answer

A good with an income elasticity of demand of 8 is considered a luxury good, meaning that as income increases, demand for the good increases at a much higher rate. Among the options, a five-star hotel is the only one that fits this category, as it is an expensive and luxurious good that people are more likely to demand as their income increases.

What Good Is Most Likely to Have an Income Elasticity