Answer to Question #15355 in Macroeconomics for robin

Question #15355
demand function of rolex or ferrari cars or vertu mobiles i need in theory?
Expert's answer
In economics, a luxury good is a good for which demand increases more than proportionally as income rises, and is a contrast to a "necessity good", for which demand is not related to income. Luxury goods are often synonymous with superior goods.
Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also
means, however, that should there be a decline in income its demand will drop.
Income elasticity of demand is not constant with respect to income, and may
change sign at different levels of income. That is to say, a luxury good may
become a normal good or even an inferior good at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his
automobile collection to start collecting airplanes (at such an income level,
the luxury car would become an inferior good).

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