Luxury products are elastic, in comparison to necessity products which are inelastic. Luxury goods are elastic because for a change in price there is a more than proportionate change in quantity. e.g. If the price of a luxury good increases, less people will purchase the good because it is not necessary in their lives - they can do without it.
elastic becoz wen price of the commodity changes , it affects the demand for the commodity .. Demand for a product is sensitive to price changes .. With icrease in price , the demand decreases nd with decrease in price , demand increases ..
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Close substitutes, increased income, luxury goods, time. Addiction makes demand less elastic, (inelastic) ex. Cigarettes. As time increases more substitutes become available.
Inelastic goods, such as gas or energy based products will always be in demand. This is owing to the fact that everyone utilizes the generally inexpensive goods. Elastic goods, on the other hand, are considered a luxury item/s, such as a Corvette or designer clothing.
An elastic product is one that if the price goes up, people will stop buying it. Examples of elastic goods are vacations, DVD's and other material items.
If a change or increase in price will affect demand. Elastic goods are usually those that the consumer does not NEED to purchase, such as luxury goods. When the producer increases price, demand will usually increase. Inelastic goods are those that the consumer needs to buy no matter what the price is, such as milk or salt. A sale or price increase won't affect the demand at all.
elastic becoz wen price of the commodity changes , it affects the demand for the commodity .. Demand for a product is sensitive to price changes .. With icrease in price , the demand decreases nd with decrease in price , demand increases ..
correct
Close substitutes, increased income, luxury goods, time. Addiction makes demand less elastic, (inelastic) ex. Cigarettes. As time increases more substitutes become available.
It is a progressive tax. Because the tax gets higher as you pay high price for the luxury goods.
Elastic goods usually have many substitutes, so changes in price will decrease demand. Inelastic goods, on the other hand, have very few substitutes, so demand isn't generally affected by price change.
The luxury tax is a tax on luxury goods, which are products considered not essential for living. The luxury is levied at different rates depending on the price of the product.
Inelastic goods, such as gas or energy based products will always be in demand. This is owing to the fact that everyone utilizes the generally inexpensive goods. Elastic goods, on the other hand, are considered a luxury item/s, such as a Corvette or designer clothing.
An elastic product is one that if the price goes up, people will stop buying it. Examples of elastic goods are vacations, DVD's and other material items.
Elastic goods usually have many substitutes, so changes in price will decrease demand. Inelastic goods, on the other hand, have very few substitutes, so demand isn't generally affected by price change.
No good is perfectly elastic: if it were, any raise in price would cause exactly zero units of the good to be demanded, and any drop in price would cause infinite units of the good to be demanded, which is not possible. Some goods are very elastic, however, like goods with close substitutes (Pepsi and Coke are good examples).
Liposuction is more price elastic as it is not a necessary procedure and could be viewed as a luxury good. The fact that it is not a necessary item also means that the consumer can put it off or have the time to shop around for a better price. Open heart surgery is not price elastic to the consumer as it is necessary to save that person's life and thus they would be willing to pay almost any price to have that surgery.