What explains that the demand for Nike shoes is more price elastic than the demand for sneakers as a whole:

a. Nike shoes are luxurious goods,

b. Nike shoes are a necessity,

c. There are fewer substitutes for Nike shoes than for sneakers as a whole,

d. There are more substitutes for Nike shoes than for sneakers as a whole.

• The demand for Nike shoes is more price elastic than the demand for sneakers as a whole because Nike shoes are luxurious goods (a).

In the business world, elasticity is used to demonstrate the changes in the amount demanded by consumers and supplied by producers as a result of variations in the income or the price levels. If the demand for a product tends to remain relatively constant after changes in income and price, it is said to have inelastic demand, and the coefficient for elasticity is a value less than one, for example, prescription drugs. On the other hand, a product with significant changes in the demand to slight variations in the price is said to be highly elastic. It has a coefficient value that is one or a number greater than one, for example, luxury commodities.