Q. What is the elasticity of demand for luxury goods?
Answer: More than one
Notes: Elasticity of demand is how much quantity demanded changes with a change in price. The price elasticity of demand for a good is largely determined by the availability of substitute goods. The more a commodity is needed, the lower the price elasticity of demand. In case of luxury goods like cars, television, furniture etc., the demand increases more in proportion to the change in income.

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