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 luxury goods perfectly elastic?

The moment you raise your price even just a little, the quantity demanded will decrease. Examples of perfectly elastic products are luxury products such as jewels, gold, and high-end cars.

What is the elasticity of luxury goods?

As for luxury goods, the income elasticity of demand is always greater than 1, it means that the relative change in demand is usually greater than the relative change in income, which in practice means that the demand for luxury goods is quite flexible.