Changes

4. "Necessity" is the name given to goods with a price elasticity of less than one because those goods will always be bought. "Luxury" is the name given to goods with a price elasticity over one because if you raise the price not many people will buy them.

4. "Necessity" is the name given to goods with a price elasticity of less than one because those goods will always be bought. "Luxury" is the name given to goods with a price elasticity over one because if you raise the price not many people will buy them.

:Your explanation for "necessity" is a bit oversimplified.  It still satisfies the Law of Demand, it just does not see much decrease in demand when its price increases.  The statement about "luxury" is wrong because it (like "necessity") is defined based on '''income''' elasticity rather than price elasticity.  (Minus 1)

:Your explanation for "necessity" is a bit oversimplified.  It still satisfies the Law of Demand, it just does not see much decrease in demand when its price increases.  The statement about "luxury" is wrong because it (like "necessity") is defined based on '''income''' elasticity rather than price elasticity. (The question was mistakenly worded.) (Minus 1)

5. A substitute for french fries may be fruit or vegetables. A complement of french fries is ketchup.

5. A substitute for french fries may be fruit or vegetables. A complement of french fries is ketchup.