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Luxuries typically have a higher price elasticity of demand compared to necessities. When consumers have more disposable income or when the price of a luxury good increases, the quantity demanded is likely to decrease significantly, as people can forgo or substitute these items more easily. Conversely, if the price of a necessity rises, consumers are less likely to reduce their consumption, making necessities more inelastic. Overall, luxuries are more sensitive to price changes due to their non-essential nature.

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1mo ago

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