Why Do Expensive Items Have an Elastic Demand

For example, luxury goods have a high price elasticity of demand because they are sensitive to price changes. … A good or service may be a luxury item, a necessity, or a comfort to a consumer. When a good or service is a luxury or a comfort good, the demand is highly price-elastic when compared to a necessary good.

Are expensive items more elastic?

More expensive goods also tend to be more elastic since consumers are more sensitive to purchases that take up larger proportions of their income.

What does a high price elasticity of demand mean?

Price elasticity of demand measures the change in consumption of a good as a result of a change in price. … This product would be considered highly elastic because it has a score higher than 1, meaning the demand is greatly influenced by price change.