Answers to the following three questions also help determine demand elasticity.

Can the purchase be delayed?The purchase of products like gold jewelry, with an elastic demand, can be delayed without hardship. But when a consumer cannot put off a purchase, such as electricity, it tends to make demand inelastic.

Are adequate substitutes available? If there are adequate substitutes, consumers can choose to buy one product or another. If the price of one item goes up, they can buy another insteaddemand is elastic. The fewer available substitutes, the more inelastic demand will be.

Does the purchase use a large portion of income?If the amount of income used to make a purchase is large, demand is likely to be elastic. It tends to be inelastic if the amount of income is small.

The answers for a particular product may not always be all yes or all no. In those cases, a judgment must be made as to the level of demand elasticity.

As you read, complete the following sentence:

1. The demand for luxury cars is _________________.
2. Write the answer for each question in the passage to support your generalization.
   1. Can the purchase be delayed?
   2. Are adequate substitutes available?
   3. Does the purchase use a large portion of income?