Buy custom Economics: Price Elasticities
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The demand for a necessity, like food for example is likely to be more price inelastic than the demand for luxury goods like branded products such as Rolex watches. However, whether a good is a necessity or a luxury depends not on the intrinsic properties of the good but on the preferences of the buyer...
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However, whether a good is a necessity or a luxury depends not on the intrinsic properties of the good but on the preferences of the buyer. As an example Europenas may not regard rice as a basic necessity.
Lastly, the degree of necessity of the good will affect the PED of the product.
The greater the need for the good, the more price inelastic will be the demand for the good...
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