A major determinant of the demand for a luxury good is____________?

  • A the price of other goods
  • B the price of the good
  • C tastes and fashion
  • D the income of consumers
jamb 2018english-language

The correct answer is D. the income of consumers

Luxury goods are often not necessary for survival but are purchased for the satisfaction they provide.

The demand for these goods is highly dependent on the income of consumers. As income increases, the demand for luxury goods tends to increase as well.

This is known as the income effect. 

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