medium · LSAT Logical Reasoning

Economists have noted that when the price of a luxury good increases, demand for that good often remains stable or even increases. This phenomenon contradicts the law of demand, which states that as prices rise, demand falls. Therefore, luxury goods are exempt from the standard laws of economics.

Which of the following is an assumption required by the argument?

  1. The law of demand is itself one of the standard economic laws to which the conclusion's 'exemption' refers.
  2. Consumers of luxury goods respond less to price changes than consumers of ordinary, everyday essential goods do.
  3. Maintaining overall market stability is the single foremost aim of essentially all forms of economic regulation.
  4. Luxury goods are identified chiefly by their unusually high price and their pronounced social exclusivity.
  5. The law of demand has never been successfully challenged for any category of goods other than luxury items.

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