Let P be the price of a good and let I represent consumer income. Whic

Let P be the price of a good and let I represent consumer income. Which of the following demand functions represents a luxury good with inelastic price response?

A) log(Q) = 4 €“ 2 log(P) + 2 log(I)
B) log(Q) = 4 – 0.5 log(P) + 0.25 log(I)
C) log(Q) = 4 – 0.25 log(P) + 2 log(I)
D) log(Q) = 4 + 2 log(P) + 0.2 log(I)

ANSWER

C