contestada

For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which ofthe following statements is most likely applicable to this good?a. There are no close substitutes for this good.b. The good is a luxury.c. The market for the good is broadly defined.d. The relevant time horizon is short

Respuesta :

Karabo99

Answer:

b. The good is a luxury.

Explanation:

Here a 2% increase in price causes 12% decrease in quantity demanded. It means elasticity is - 6% . So, demand is very elastic and hence its a luxury good.

Tundexi

The statement that is applicable to the particular goods is Luxury goods

In economist view, the luxury good refers to the goods that such demand on it grows more and faster than an increase of the income of a potential buyers.

In this case here, there is a 2% increase in price and that caused a 12% decrease in quantity demanded, that means that the income of the consumers does not grows as the price increases.

Such type of goods can be said to be a luxury goods.

Therefore, Option A. is correct because it is the most applicable to the particular goods.

Learn more about Luxury goods here

brainly.com/question/3224350

Otras preguntas