Which of the following would cause a demand curve for a good to be price inelastic?

Which of the following would cause a demand curve for a good to be price inelastic?
A . There are a great number of substitutes for the good
B . The consultancy service
C . The luxury goods
D . The necessary goods

Answer: D

Explanation:

Essential goods andservices such as electricity, fuel, basic food stuffs, commuter transport and habitual products such as tobacco, alcohol and sugar-based drinks are often sited as facing a relatively inelastic demand curve. This means when the price goes up, the quantity demanded does not decrease very much and so they are often the target of government taxation.

LO2, AC 2.2