______ goods have price elasticity of demand greater than 1

Necessary Goods

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Luxury Goods

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Solution

The correct option is B Luxury Goods
Price elasticity of demand is an economic measure of the change in the quantity demanded or purchased of a product in relation to its price change.

Luxury goods represent normal goods associated with income elasticities of demand greater than one. Consumers will buy proportionately more of a particular luxury good compared to percentage change in their income.

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