In the context of elasticity of demand, which of the following goods is likely to have inelastic demand?
A. Air conditioners
B. Luxury cars
C. Salt
D. Jewellery
Answer: Option C
Solution (By JKSSB Mock Tests)
Necessities like salt have inelastic demand because quantity demanded does not change significantly with price changes. Luxuries tend to have elastic demand.
Explanation:
Cost of production affects supply, not the elasticity of demand. Elasticity of demand depends on substitutes, nature of the good, income proportion, time, and habits.
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