Demand for luxuries is:

Correct option is A

Demand for luxury goods is termed elastic, which means it responds significantly to changes in price. Elastic demand occurs when a slight increase in the price of luxury items causes a noticeable drop in the quantity demanded, and conversely, a price decrease leads to a considerable rise in demand. This sensitivity is because luxury goods are non-essential and often have many substitutes, allowing consumers to postpone or avoid purchases if prices rise.
Information Booster: Elasticity of demand measures how much the quantity demanded of a good responds to price changes. Luxuries, such as expensive jewellery, designer apparel, and luxury cars, are not necessary for survival. Therefore, consumers' purchasing decisions are influenced greatly by price fluctuations. Businesses selling luxury products must be mindful of pricing strategies, as price increases can lead to substantial declines in sales volume. Understanding elastic demand helps in marketing and inventory planning for such goods.
Additional Knowledge:
· (b) Erratic: This term refers to unpredictable or irregular demand patterns but does not describe responsiveness to price changes.
· (c) Inelastic: Describes goods whose demand changes little with price fluctuations, common for necessities like salt or basic utilities.
· (d) Infinite: Implies an unrealistic scenario where demand is unlimited regardless of price, which does not apply to any real market.